By Aya Takada and Supunnabul Suwannakij
May 11 (Bloomberg) -- Rubber declined, reversing earlier gains, as commodities slumped on concerns that European bailout plans worth almost $1 trillion may not be sufficient to end the region’s sovereign debt crisis.
Futures in Tokyo fell as much as 2 percent to 264.1 yen per kilogram ($2,851 a metric ton) after jumping as much as 3.6 percent earlier. The price slumped to a five-month low of 259.5 yen per kilogram on May 7 on concerns that Europe’s debt crisis may slow the global economic recovery and weaken demand for the commodity used to make tires.
“Worries over European debt crisis spurred selling on equities around the globe, strengthening the dollar and pressuring commodities markets,” Kant Julotok, analyst at commodity broker Agrowealth Ltd., said by phone from Bangkok.
Rubber for October delivery, the most-active contract, declined 1.8 percent to settle at 264.5 yen on the Tokyo Commodity Exchange. The price touched a 21-month high of 338.5 yen on April 16 on speculation that economic growth will boost demand for the raw material.
Asian stocks fell as commodity-related companies dropped on concern that China will step up efforts to cool growth. Crude oil fell as investors questioned whether the European bailout plan will reduce deficits in Greece, Spain and Portugal.
The MSCI Asia Pacific Index of equities fell as much as 1.1 percent after climbing 1.5 percent yesterday, the first gain in six days. The euro dropped against the dollar today for the first time in three days.
Crude oil for June delivery declined as much as 0.9 percent to $76.10 a barrel in electronic trading on the New York Mercantile Exchange before trading at $76.15.
Car Sales Slow
Rubber also dropped after data showed yesterday that growth in China’s car sales slowed in April to the lowest level since March 2009, stoking concern that demand in the world’s largest rubber consumer may weaken, Kazuhiko Saito, an analyst at commodity broker Fujitomi Ltd., said today.
Sales of cars, sport-utility vehicles and multipurpose vehicles increased 33 percent from a year earlier to 1.11 million units, compared with a 63 percent jump in March, the China Association of Automobile Manufacturers said. Total vehicle demand climbed 34 percent to 1.56 million.
Chinese consumers’ willingness to spend dropped in the first quarter, possibly because of rising property prices, Nielsen Co. and the nation’s statistics bureau said in a statement on May 6, citing a survey. Consumer prices rose 2.8 percent in April from a year earlier, the fastest pace in 18 months, and property prices jumped 12.8 percent, the statistics bureau said today.
The free-on-board price of Thai RSS-3 grade rubber for June-delivery, which excludes freight and insurance, rose 2.7 percent to 112.65 baht ($3.48) a kilogram, according to the Rubber Institute of Thailand. The price climbed to a record 130.55 baht on April 28.
September-delivery rubber on the Shanghai Futures Exchange lost 1.8 percent to settle at 22,170 yuan ($3,247) a ton. It plunged to 22,000 yuan a ton on May 7, the lowest level since Feb. 9.
(businessweek.com)
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