Rubber Drops as China Manufacturing Data Raises Demand ConcernAya Takada
Rubber declined for a second day as data showed China’s manufacturing is growing at a slower pace, raising concern that demand may weaken.
Rubber for delivery in September fell 0.7 percent to settle at 249.2 yen a kilogram ($2,526 a metric ton) on the Tokyo Commodity Exchange. The drop expanded this year’s loss for the most-active contract to 18 percent.
The preliminary reading of 50.5 for China’s Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics slowed from a final 51.6 for March. The number was also below the median 51.5 estimate in a Bloomberg News survey of 11 analysts. Japan’s currency advanced to 98.66 per dollar, cutting the appeal of yen-denominated contracts, as the Chinese data boosted investor demand for haven.
“The PMI data confirmed lots of investors’ expectation that the recovery in China remains anemic,” Tang Lizhi, China president at Okachi Shoji, said by phone from Shanghai today. “With the expectation for rising rubber production in Southeast Asia, there’s no reason to add bullish positions.”
Rubber for September delivery on the Shanghai Futures Exchange lost 0.8 percent to close at 18,465 yuan ($2,989) a ton.
Thai rubber free-on-board gained 1 percent to 81.30 baht ($2.82) a kilogram today, according to Rubber Research Institute of Thailand. The nation, the world’s largest producer, is working on plans to reduce supply and increase demand to stabilize prices, Amnuay Patise, head of a working group for the government, said yesterday.