Rubber Falls From One-Week High on Concern Demand Will Weaken

Rubber retreated from a one-week high after U.S. jobs data missed estimates and on concern that slowing growth in China, the biggest buyer, may cut demand for the commodity used in tires.

The contract for delivery in January dropped 0.9 percent to end at 245.8 yen a kilogram ($2,499 a metric ton) on the Tokyo Commodity Exchange. Futures on Aug. 2 settled at the highest level since July 26 and have fallen 19 percent this year.

Labor Department figures showed U.S. payrolls rose by 162,000 in July, the smallest gain in four months and lower than an increase of 185,000 projected economists. The Chinese economy may slow in the fourth quarter and the government will stick to economic restructuring while avoiding new measures to “bail out or support the market,” State Information Center researcher Qi Jingmei wrote in a commentary in the China Daily today.

“The U.S. employment data was not as good as expected, driving a decline on equities markets and spilling over to Tocom rubber,” said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co. in Tokyo. Concern that China’s economy will slow may translate into lower demand for rubber, he said.

Rubber for January delivery rose 1.5 percent to close at 18,280 yuan ($2,985) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board was unchanged at 77.25 baht ($2.46) a kilogram today, according to the Rubber Research Institute of Thailand.

Crude rubber stockpiles held at Japanese warehouses fell 9.7 percent to 10,192 tons on July 20, according to data from the Rubber Trade Association of Japan. Natural-rubber inventories fell 20 tons to 117,913 tons, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, according to the Shanghai Futures Exchange last week.

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