Rubber Falls to Five-Month Low as Chinese Demand May Slow

Rubber in Tokyo declined for a third day to the lowest price in five months amid concern that slowing economic growth in China may weaken demand from the world’s largest consumer of the commodity used in tires.

The contract for delivery in June on the Tokyo Commodity Exchange fell 1.1 percent to end at 249.6 yen a kilogram ($2,386 a metric ton), the lowest settlement for a most-active contract since Aug. 7. It lost 9.1 percent this month after falling 9.3 percent in 2013. Futures for May delivery in Shanghai lost 2.4 percent to close at 16,425 yuan ($2,715) a ton.

A manufacturing gauge for China from HSBC Holdings Plc and Markit Economics probably dropped to 50.3 this month from 50.5 last month, according to a Bloomberg News survey before data on Jan. 23. Growth in the second-biggest economy slowed in the fourth quarter as gains in factory output and investment spending eased in December, government data showed yesterday.

“Futures on the Tocom tracked declines on the Shanghai market, amid concerns that economic slowdown in China may reduce demand for rubber,” said Gu Jiong, an analyst at Yutaka Shoji Co., a commodity broker in Tokyo. Higher stockpiles in China and Japan also signaled that demand weakened, he said.

Stockpiles monitored by the Shanghai Futures Exchange increased 5.6 percent to 200,815 tons, the largest since October 2004, data from the bourse showed on Jan. 17. It was the seventh straight week of gain.

Rubber free-on-board was unchanged at 77.25 baht ($2.35) a kilogram today, according to the Rubber Research Institute of Thailand.

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