Rubber Has Quarterly Loss on Rising Inventories, China Outlook

Rubber had the first quarterly loss since June as swelling stockpiles and slowing production in China signaled weakened demand from the world’s largest user.

The contract for delivery in September fell 0.3 percent to 274 yen a kilogram ($2,913 a metric ton) on the Tokyo Commodity Exchange, the lowest settlement for a most-active contract since March 19. Futures slumped 9.4 percent in the last three months after two quarters of gains.

China tightened curbs on the property market this month to moderate prices while the nation’s manufacturing expanded at the slowest pace in five months in February and retail-sales growth eased. Natural-rubber inventories climbed 1.9 percent last week to 115,991 tons, the highest level in three years, data from the Shanghai Futures Exchange showed March 22. The bourse will update the data later today.

“Stockpiles in China may expand further as demand failed to pick up,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said today by telephone.

China’s demand for the commodity may be unchanged this year as consumption by the heavy-truck sector slows while tire output for passenger vehicles climbs, according to Hangzhou Zhongce Rubber Co. China represents 34 percent of global rubber demand, according to the International Rubber Study Group.

The contract for September delivery added 0.3 percent to 22,165 yuan ($3,569) a ton on the Shanghai Futures Exchange. It also fell for the quarter.

Thai rubber free-on-board lost 0.6 percent to 85.55 baht ($2.92) a kilogram today, according to the Rubber Research Institute of Thailand.

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