Rubber declined for a fourth day, heading for its worst loss in five weeks, as accelerated inflation in China raised speculation that it may increase interest rates, curbing demand from the world’s largest user.
The September-delivery contract lost as much as 2.6 percent to 430.8 yen per kilogram ($5,162 a metric ton) before trading at 436.2 yen on the Tokyo Commodity Exchange at 12:27 p.m.
China’s statistics bureau said today consumer prices rose 5.4 percent in March from a year earlier, the fastest pace since 2008. Taming prices is the government’s top and “urgent” priority, China’s cabinet said after meeting in Beijing this week to review the performance of the economy.
“Expectations for a further increase in Chinese interest rates put a drag on rubber futures,” Takaki Shigemoto, a commodity analyst at JSC Corp. in Tokyo, said today by phone.
China’s central bank has lifted interest rates four times since mid-October to curb inflation. Bank of America Merrill Lynch said yesterday that an increase in reserve requirements for banks may be “imminent” after the nation’s foreign- exchange holdings jumped to a world record $3 trillion.
Losses in rubber futures were limited as data today from the statistics bureau also showedChina’s economy grew a more- than-estimated 9.7 percent in the first quarter and industrial production climbed 14.8 percent in March.
“Given the strength of China’s economy, car sales in the nation are unlikely to slow significantly, even if the central bank raises borrowing costs,” Shigemoto said.
Car Sales
China’s passenger-car sales grew in March at a pace that was below forecasts after incentives ended and fuel prices rose, the China Association of Automobile Manufacturers said April 10.
Dispatches of cars including multipurpose vehicles and sport-utility vehicles to dealerships rose 6.52 percent from a year earlier to 1.3 million units, according to the Chinese association. That pace was about one-tenth of the 63 percent sales increase reported in March of last year.
Rubber futures have dropped 6 percent this week, the biggest decline since the week ended March 11, amid concern that Japan’s nuclear crisis may weaken consumer spending and car sales. Japan raised the severity rating of its nuclear crisis to the highest level on April 12, matching the 1986 Chernobyl disaster, as increasing radiation prompts the government to widen the evacuation zone and aftershocks rocked the country.
Rubber output in Thailand, the world’s largest exporter, may improve next week as producers affected by a flood prepare to resume operations, Shigemoto said.
The floods in 10 southern provinces killed 61 people, according to Thailand’s Department of Disaster Prevention & Mitigation. About 50,000 rai (19,641 acres) of rubber plantations were damaged.
The Thai rubber market is closed for New Year holidays. The physical price of Thai rubber was unchanged at 184.8 baht ($6.15) a kilogram on April 12, according to the Rubber Research Institute of Thailand.
Rubber for September delivery in Shanghai lost 0.6 percent to 35,440 yuan ($5,426) a ton at 11:28 a.m. local time.
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