Rubber Drops on Concerns About China Demand, Rising Stockpiles

Rubber retreated from an almost two-month high on concerns that demand from China may weaken after inventories climbed to a three-year high.

Rubber for delivery in January dropped 0.3 percent to end at 266.5 yen a kilogram ($2,730 a metric ton) on the Tokyo Commodity Exchange. The most-active contract earlier climbed to 268.8 yen, nearing a two-month high reached on Aug. 14. Futures have fallen 12 percent this year.

Natural-rubber inventories increased 4,457 tons to 122,645 tons, the highest level since February 2010, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, according to the Shanghai Futures Exchange.

“Increasing rubber stockpiles raised concerns about Chinese demand,” said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo.

Rubber for delivery in January dropped 0.1 percent to close at 19,855 yuan ($3,243) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board added 0.9 percent to 81.75 baht ($2.60) a kilogram today, according to the Rubber Research Institute of Thailand.

The Thai government planned to spend 30 billion baht to support farmers and rubber processors, Deputy Prime Minister Yukol Limlamthong said Aug. 15. The country has no plan to sell state inventories, he said.

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