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Rubber Declines as China’s Cash Crunch Spreads to Auto Dealers

July 10 (Bloomberg) -- Rubber fell the most in nearly a month as a cash crunch in China, the biggest consumer, is spreading to the nation’s auto dealerships.

Rubber for delivery in December on the Tokyo Commodity Exchange fell 2.8 percent, the most at close since June 13, to 234.7 yen a kilogram ($2,346 a metric ton). Futures have lost 22 percent this year.

China’s cash crunch has led to psychological panic among auto dealers over access to financing, Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said yesterday. The state-backed China Association of Automobile Manufacturers is scheduled to release wholesale vehicle sales data today.

“Investors remain concerned over slow demand from China,” said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co.

China’s inflation stayed subdued in June while a decline in factory-gate prices extended its longest streak in a decade, underscoring weaker demand in an economy that probably decelerated for a second quarter.

Rubber for January delivery on the Shanghai Futures Exchange rose 0.6 percent to close at 17,280 yuan ($2,817) a ton.

Thai rubber free-on-board fell 1.2 percent to 80.70 baht ($2.58) a kilogram today, according to the Rubber Research Institute of Thailand.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

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

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