Rubber in Tokyo and Shanghai sank as concern grew that property prices in China will retreat, weakening raw-material demand from the largest consumer.
Futures for July delivery on the Tokyo Commodity Exchange lost 4.3 percent to 217.2 yen a kilogram ($2,123 a metric ton). It was the biggest daily drop at close for a most-active contract since Feb. 6. Rubber for May delivery on the Shanghai Futures Exchange plunged by the daily price limit to 14,805 yuan ($2,429) a ton. That’s the lowest close for Shanghai futures since May 2009.
New-home price growth in China’s first-tier cities slowed in January after local governments implemented property measures to rein in escalating values and banks tightened lending. Home prices in the southern business hubs of Guangzhou and Shenzhen rose at the slowest pace since July.
“Chinese investors rushed to sell riskier assets from stocks to copper and rubber as concerns grew property bubbles in China may burst,” said Gu Jiong, an analyst at Yutaka Shoji Co., a commodity broker in Tokyo.
China’s stocks fell today, sending the benchmark index to its biggest loss in seven weeks, amid speculation that reduced lending to the property industry will curb growth in the world’s second-largest economy. The Shanghai Securities News reported Industrial Bank Co. and other banks have curbed lending to the property sector and some related industries such as steel and cement.
Auto sales growth in China will be capped at 10 percent this year compared with 14 percent in 2013, the state-backed China Association of Automobile Manufacturers forecast in January. Wholesale deliveries missed analyst estimates last month, rising 7 percent to 1.8 million units, the smallest gain since sales fell in February 2013.
Rubber in Tokyo dropped into a bear market on Jan. 28 amid concern that global production was outpacing demand and as inventories in China climbed to a nine-year high.
Futures on the Tokyo exchange, the international benchmark, will drop to as low as 200 yen a kilogram in 2014 according to the median of 15 estimates compiled by Bloomberg News this month. That’s 63 percent below the record set in 2011.
Inventories tracked by the Shanghai Futures Exchange reached 207,658 tons on Jan. 30, the highest since October 2004, while inventories in bonded warehouses in Qingdao, China’s main hub for the commodity, advanced 20 percent to 207,500 tons on Feb. 14 from a month earlier.