Rubber Extends Fourth Monthly Decline on Oil Drop, Chinese Data

Rubber extended a fourth monthly decline as a drop in oil and weaker-than-expected Chinese economic data cut the appeal of the commodity as an alternative to synthetic products used in tires.

Rubber for delivery in November dropped 0.5 percent to end at 257 yen a kilogram ($2,566 a metric ton) on the Tokyo Commodity Exchange. Futures lost 1.6 percent in May and have declined 15 percent this year.

Brent crude dropped below $100 a barrel for the first time in a month and WTI declined amid speculation that stockpiles will climb after the Organization of Petroleum Exporting Countries kept its production target unchanged. China’s private manufacturing index today fell more than forecast to 49.2, an eight-month low, from 50.4. Levels below 50 signal contraction, according to the government data.

“Sharp falls in crude oil prices and a slowdown in Chinese economic data hurt market sentiment, driving a decline on Tocom,” Sureerat Kunthongjun, an analyst at Agrow Enterprise Ltd., said by phone from Bangkok.

Japan’s currency traded near a three-week high against the dollar, cutting the appeal of the yen-denominated futures, as a decline in global stocks raised investor appetite for the haven.

“Rubber came under pressure as it lost support from the currency and energy markets,” Takaki Shigemoto, an analyst at research company JSC Corp., said by phone.

Thai rubber free-on-board fell 3.8 percent to 88.40 baht ($2.91) a kilogram today, the lowest level since May 3, according to the Rubber Research Institute of Thailand.

Rubber for delivery in September on the Shanghai Futures Exchange rose 1.2 percent to close at 18,955 yuan ($3,091) a ton. Natural-rubber inventories dropped for a fourth week, by 0.6 percent, to 114,225 tons, the bourse said on May 31, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, according to the exchange.

To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net; Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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