Rubber in Tokyo fell the most since May as rising inventories in China signaled slowing demand from the world’s largest consumer while a stronger Japanese currency reduced the appeal of yen-denominated futures.
The contract for delivery in June on the Tokyo Commodity Exchange lost 5.1 percent to 229.3 yen a kilogram ($2,234 a metric ton), the lowest settlement for a most-active contract since June 26. It was the biggest daily loss since May 23. Prices have fallen for six weeks, the longest losing streak since October 2008, to the cusp of a bear market.
Stockpiles monitored by the Shanghai Futures Exchange increased by 1.8 percent to 204,451 tons last week, the largest amount since October 2004, data from the bourse shows. The yen appreciated to 101.77 per dollar today, the highest level since Dec. 6, as concerns about the health of emerging economies boosted demand for the Japanese currency as a haven. The yen later reversed the advance.
“Rising inventories in China added to speculation that the rubber market is oversupplied,” said Masayo Kondo, the president of Commodity Intelligence Ltd., a Tokyo-based research company. “Futures will remain under pressure with attention on Chinese demand.”
A decline to a closing level of 228.8 yen would be a 20 percent drop from rubber’s Sept. 9 high of 286 yen, meeting the common definition of a bear market.
Rubber for May delivery on the Shanghai Futures Exchange lost 3.7 percent to 15,950 yuan ($2,637) a ton, the lowest close since July 2009.
Rubber free-on-board at Songkhla, Thailand, fell 1.3 percent to 74.75 baht ($2.27) a kilogram today, according to the Rubber Research Institute of Thailand.
Anti-government protests in Thailand may curb supply from the world’s largest exporter by 10 percent to 20 percent this month and next from an average 300,000 tons to 350,000 tons a month, according to Von Bundit Co., the nation’s second-largest producer.