Rubber Drops Most in Two Weeks as U.S. Data Raise Demand Concern

Rubber declined the most in two weeks as Japan’s currency advanced, cutting the appeal of the yen-denominated futures, and reports showed a slower pace of growth in U.S. manufacturing and payrolls.

Rubber for October delivery lost 2.4 percent to settle at 253.5 yen a kilogram ($2,606 a metric ton) on the Tokyo Commodity Exchange. That was the biggest drop for the most-active contract at close since April 18. Futures have plunged 16 percent this year.

The yen climbed to 97.09 per dollar toward a two-week high, after the Institute for Supply Management’s factory index yesterday showed manufacturing in the U.S. expanded in April at the slowest pace in four months. U.S. companies added 119,000 jobs last month, the least since September, according to figures from ADP Research Institute.

“Data from the U.S. raised demand concerns,” Takaki Shigemoto, an analyst at researcher JSC Corp., said by phone.

U.S. light-vehicle sales climbed 8.5 percent to 1.29 million in April, according to researcher Autodata Corp, trailing the average estimate of nine analysts surveyed by Bloomberg for an 11 percent increase to 1.31 million.

Rising stockpiles in China, the biggest user, and Japan have also hurt market sentiment, said Chaiwat Muenmee, analyst at Bangkok-based broker DS Futures Co.

Inventories in Qingdao, China’s main hub for the commodity, rose to a record 371,100 tons in April, according to the Qingdao International Rubber Exchange Market. Crude rubber stockpiles held at Japanese warehouses were 15,976 tons on April 20, the highest since 2007, Rubber Trade Association of Japan data show.

Rubber for September delivery on the Shanghai Futures Exchange closed 0.2 percent higher at 19,120 yuan ($3,106) a ton after slumping 3.5 percent to 18,410 yuan. The market resumed trade today after a three-day break.

Thai rubber free-on-board fell for the first time in eight sessions, declining 0.6 percent to 85.30 baht ($2.90) a kilogram, according to the Rubber Research Institute of Thailand.

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