Rubber declined from an eight-month high as Japan’s currency strengthened and the country’s car sales dropped, raising concern that demand for the commodity used in tires may falter.
Rubber for delivery in June lost 1.3 percent to settle at 303.7 yen a kilogram ($3,458 a metric ton) on the Tokyo Commodity Exchange. The most-active contract earlier climbed to 313.7 yen, the highest level since May 7.
Japan’s motor vehicle sales dropped 3.4 percent to 212,429 units in December for a fourth month of decline, according to data released by the Japan Auto Dealers Association. The yen rallied from a 2 1/2 year low against the dollar, cutting the appeal of yen-denominated contracts.
“The rebound of the Japanese yen and a decline in car sales in Japan soured market sentiment,” Chaiwat Muenmee, an analyst at DS Futures Co., said by phone from Bangkok.
Rubber for delivery in May fell 1 percent to close at 26,075 yuan ($4,186) a ton on the Shanghai Futures Exchange. Natural-rubber inventories gained 1,770 tons to 97,697 tons, the highest since March 2010, the bourse said on Jan. 4, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin.
Thai rubber free-on-board added 0.2 percent to 102.35 baht ($3.36) a kilogram today, according to the Rubber Research Institute of Thailand.