Rubber futures slumped to an eight-week low, wiping out this year’s gains, as Federal Reserve minutes showed policy makers advocating more flexibility in economic stimulus and on concern Thailand will increase supplies.
The contract for July delivery lost 2.6 percent to 297.5 yen a kilogram ($3,184 a metric ton) on the Tokyo Commodity Exchange, the lowest settlement since Dec. 26. Futures have retreated 1.7 percent this year.
Several Fed policy makers said the central bank should be ready to vary the pace of their $85 billion in monthly bond purchases, amid a debate on the risks and benefits of further easing. Thailand, the largest exporter, will review a program to support prices by purchasing from farmers at the end of March, Deputy Farm Minister Yuttapong Charasathien said Feb. 19. That raised concerns supplies will increase.
“Rubber tracked losses in oil and other industrial commodities amid speculation the Federal Reserve may curtail monetary stimulus,” said Takaki Shigemoto, analyst at research company JSC Corp. in Tokyo. “Concerns that Thailand will end price-support measures also put pressure on the commodity.”
Futures extended losses as China, the world’s biggest rubber user, ordered increased property curbs, spurring sales of stocks and commodities, he said.
The contract for September delivery on the Shanghai Futures Exchange lost 2.8 percent to close at 25,085 yuan ($4,019) a ton. Thai rubber free-on-board fell 3.2 percent to 91.70 baht ($3.07) a kilogram today, according to the Rubber Research Institute of Thailand.