Rubber Declines for Fourth Day as Crude Oil Retreat Curbs Demand for Tires

Rubber slumped for a fourth day as crude oil extended losses, reducing the appeal of the commodity used to make tires.

Futures in Tokyo fell as much as 2.4 percent to the lowest level in almost three weeks. Oil, base metals and Asian stocks dropped after China’s manufacturing growth slowed and Moody’s Investors Service placed Spain’s credit rating on review for a possible downgrade.

“Concern over the slowing global economy kept putting downward pressure on industrial commodities and equities,” Takaki Shigemoto, an analyst at JSC Corp., said today.

December-delivery rubber lost as much as 6.4 yen to 262.8 yen per kilogram ($2,982 a metric ton), the lowest since June 11, on the Tokyo Commodity Exchange, before trading at 264.2 yen as of 12:47 p.m. The price dropped 12.7 percent in the second quarter, the first loss since 2008.

Crude oil fell for a fourth day in New York, with the price for August delivery declining as much as 1.3 percent o $74.63 a barrel after reports from the U.S. showed companies added fewer workers in June than forecast and an unexpected increase in gasoline stockpiles in the largest energy consumer.

Copper in London fell as much as 1.3 percent to $6,430.75 a ton and the MSCI Asia Pacific Index dropped as much as 1.4 percent to 111.18.

China’s manufacturing expanded at a slower pace for a second month in June, adding to signs that growth in the world’s third-largest economy is moderating. The Purchasing Managers’ Index fell to 52.1 from 53.9 in May, the Federation of Logistics and Purchasing said today. That was less than the median 53.2 estimate in a Bloomberg News survey of 12 economists.

November-delivery rubber on the Shanghai Futures Exchange fell 2 percent to 21,160 yuan ($3,119) a ton at the 11:30 a.m. local time break. China is the world’s largest auto market and the biggest consumer of natural rubber.

(bloomberg.com)