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Rubber Drops as Stockpiles May Grow, Paring Second Weekly Gain

Feb. 8 (Bloomberg) -- Rubber futures in Tokyo declined for a second day, paring a second weekly advance, on concern that stockpiles in China, the largest consumer, may increase.

The contract for delivery in July dropped 0.8 percent to settle at 330.2 yen a kilogram ($3,555 a metric ton) on the Tokyo Commodity Exchange. Futures gained 2.1 percent this week, the ninth advance in 10 weeks, and are up 9.2 percent this year.

Stockpiles monitored by the Shanghai Futures Exchange rose 0.8 percent to 98,814 tons last week, nearing an almost three-year high reached in January, data from the bourse showed. The figure is updated today. Inventories may climb further as raw-material purchases slowed before holidays next week, said Hideshi Matsunaga, an analyst at broker ACE Koeki Co.

“A slowdown in Chinese buying has put a brake on rubber prices,” Matsunaga said by phone today in Tokyo.

China’s markets are closed next week for the Lunar New Year holiday. Imports by members of the Association of Natural Rubber Producing Countries, representing 57 percent of global demand, may drop 16 percent in February, the group said in a monthly report. Key members include China, India and Malaysia.

Natural-rubber imports by China were 250,000 tons in January, government data showed, 19 percent more than December.

On the Shanghai Futures Exchange, rubber for delivery in September lost 1.2 percent to close at 26,720 yuan ($4,286) a ton. Thai rubber free-on-board dropped 0.5 percent to 98.15 baht ($3.29) 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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