Natural rubber fell to the lowest in almost three weeks as a sell-off in global stocks and commodities heightened investor concerns that the recession will slash demand for the commodity used in car tyres.
Futures in Tokyo lost as much as 5.3 per cent to the lowest since April 2 after plunging the most in eight days yesterday.
Asian stocks slumped as higher loan-loss reserves at Bank of America Corporation derailed optimism that the global economy might be recovering.
The Reuters/Jefferies CRB Index of raw materials tumbled 3.9 per cent yesterday, the biggest loss since March 2. “The slump in equity markets signifies that a recovery in economies may still be far away,” Shuji Sugata, research manager at Mitsubishi Corp Futures & Securities, said. “A lack of recovery will likely cap prices of industrial commodities for a while.”
Rubber for September delivery, the most-active contract, lost 4.5 per cent to settle at 158.1 yen a kilogram ($1,610 a metric ton) on the Tokyo Commodity Exchange. Prices reached a five-month peak of 179.7 yen on April 13. Michael Coleman, who helps manage a commodity fund that returned 24 per cent last year, and Felix Yeo, trading manager at the Singapore unit of Marubeni Corp, said this month that rubber prices may weaken as much as 35 per cent.
Tyre makers, the biggest consumers of rubber, may report a 6.8 per cent sales slump in 2009 on weak auto demand, according to the government-funded International Rubber Study Group in Singapore. Supplies from Thailand, the top exporter, will increase after a seasonal drop, producers say.
Auto output in Japan by Toyota Motor Corp, the largest Japanese car maker, may fall below 3 million vehicles for the first time in 31 years as the global recession cripples US and domestic automobile demand.
Domestic output may fall to about 2.8 million units this financial year, the Yomiuri newspaper said today. Keisuke Kirimoto, a Toyota spokesman, declined to confirm or deny the report.
September-delivery rubber on the Shanghai Futures Exchange, the most-active contract, fell by the daily limit of 4.1 per cent to 14,495 yuan ($2,122) a tonne.
