Rubber in Tokyo Trades Near 17-Month Low Amid China Holidays

Rubber in Tokyo traded near the lowest level in 17 months as demand from biggest-user China remains subdued during holidays, while output in major producing nations is poised to decline.

The contract for delivery in July rose and fell by at least 1.2 percent before trading at 220.6 yen a kilogram ($2,177 a metric ton) by 11:48 a.m. local time on the Tokyo Commodity Exchange. Futures earlier touched 217.8 yen, the lowest intraday level for a most-active contract since Sept. 5, 2012. The commodity entered a bear market last week and has lost 20 percent this year.

Markets in China are closed through Feb. 6 for Lunar New Year holidays. Rubber stockpiles monitored by the Shanghai Futures Exchange expanded 1.6 percent to 207,658 tons last week, the largest amount since October 2004, exchange data showed. Futures on the bourse closed 1 percent lower at 15,480 yuan ($2,554) a ton on Jan. 30, down 15 percent this year.

“Investors are focusing on whether Chinese buying will pick up after the Lunar New Year holiday,” said Kazuhiko Saito, an analyst at broker Fujitomi Co in Tokyo. “Gains were limited as concerns about emerging economies remain.”

Prices rose earlier amid expectations that supply will decrease as Thailand enters a low-production season this month, he said. The period begins in late February in top growers including Thailand and Malaysia, according to the International Rubber Consortium.

Rubber free-on-board at Songkhla, Thailand, retreated 0.4 percent to 70.5 baht ($2.15) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

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

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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