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Rubber Drops, Paring Monthly Gain, as Japan Data Miss Estimates

Jan. 31 (Bloomberg) -- Rubber retreated from the highest level in more than a week after Japanese industrial production missed estimates, reducing investor appetite for the commodity used in tires.

The contract for delivery in July ended little changed at 315.6 yen a kilogram ($3,474 a metric ton) on the Tokyo Commodity Exchange after climbing to 317.2 yen, the highest level since Jan. 21. Futures gained 4.3 percent in January for a third monthly advance.

Japanese output rose 2.5 percent last month, compared with estimates for a 4.1 percent gain, while U.S. gross domestic product shrank at a 0.1 percent annual rate last quarter, the worst performance since 2009. Data tomorrow will probably show U.S. employers added more workers this month, after the Federal Reserve said yesterday it will keep purchasing securities at the rate of $85 billion a month.

“Lower-than-expected data from the U.S. and Japan pressured the rubber market,,” Chaiwat Muenmee, an analyst at DS Futures Co., said by phone from Bangkok.

Losses were capped on expectations that export curbs and a recovery in demand will bolster prices this year, said Takaki Shigemoto at research company JSC Corp. in Tokyo.

Diminishing rubber supplies and record car sales are extending a five-month bull market that’s poised to raise costs for tiremakers, according to analysts surveyed by Bloomberg. Futures will advance to 350 yen in Tokyo this year, the median of 12 analyst estimates show.

Rubber for May delivery rose 0.4 percent to close at 26,285 yuan ($4,227) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board dropped 0.2 percent to 96.65 baht ($3.24) a kilogram today, according to the country’s rubber research institute.

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net

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

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