Rubber Drops to Five-Month Low as Chinese Stockpiles Expand

Rubber futures in Tokyo reached a five-month low as stockpiles in China continued expanding, deepening concern that demand from the largest user is slowing.

The contract for delivery in June on the Tokyo Commodity Exchange lost 1.4 percent to 252.8 yen a kilogram ($2,444 a metric ton), the lowest settlement since Aug. 7. Futures extended last week’s 6.6 percent drop, the most since the five days through April 19. Markets in Tokyo were closed yesterday for a holiday.

Inventories monitored by the Shanghai Futures Exchange expanded 8 percent to 190,158 tons by Jan. 9, the highest level since October 2004, data from the bourse showed. The commodity, used in tires, has slumped 7.9 percent this month in Tokyo.

“Swelling stockpiles in China fueled concern that the Chinese market is oversupplied,” said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo.

Futures for May delivery on the Shanghai bourse jumped 2.5 percent to close at 16,750 yuan ($2,773) a ton after earlier falling to 16,235 yuan, the lowest intra-day level since July 2009. China’s imports rose to a record 350,000 tons last month, customs data showed on Jan. 10

Rubber free-on-board fell 1.3 percent to 77.25 baht ($2.36) a kilogram today, according to the Rubber Research Institute of Thailand.

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