Rubber declined for a second day to the lowest level in more than a week after Toyota Motor Corp. (7203) said its car production in Europe will be halted later this month, boosting speculation demand for tires will weaken.
The September-delivery contract lost as much as 4.6 percent to 438.2 yen per kilogram ($5,210 a metric ton), the lowest level since April 4. It settled at 450.4 yen on the Tokyo Commodity Exchange.
Output at Toyota’s five European plants will be halted for several days in late April and early May because of a shortage of parts as a result of the March 11 earthquake in Japan, the company said yesterday. The world’s biggest automaker also told U.S. dealers that assembly disruptions triggered by the record quake may thin supplies of vehicles into the third quarter.
“The car industry has not yet recovered from damage caused by the quake, Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said by phone today. “Concerns about demand put a drag on rubber prices.”
The Japanese government cut its assessment of the economy for the first time in six months after the earthquake and tsunami that followed killed more than 12,000 and led to the worst nuclear crisis since Chernobyl.
“Although the Japanese economy was picking up, it has shown weakness” since the temblor, the Cabinet Office said in a report today. A power shortage that resulted from a crippled nuclear facility, delays in resolving supply-chain disruptions and costlier oil threaten to depress growth further, it said.
Oil Rebounds
Losses in rubber futures were limited as oil gained for the first time in three days, raising the appeal of the commodity as an alternative to synthetic products made from petroleum.
Crude oil for May delivery rose 0.6 percent to $106.92 per barrel in electronic trading on theNew York Mercantile Exchange at 3:52 p.m. Tokyo time amid speculation that U.S. gasoline stockpiles are shrinking.
Oil tumbled 5.9 percent on April 11 and 12, the biggest two-day retreat since May 14 and May 17 in 2010. The IEA reported signs of an oil-demand “slowdown” in its monthly Oil Market Report.
The physical price of Thai rubber was unchanged at 184.8 baht ($6.15) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The price was supported as supply fell after recent floods in southern Thailand, it said. The Thai market was closed for national holiday today.
The floods in 10 southern provinces have killed 61 people, according to the Department of Disaster Prevention & Mitigation. About 50,000 rai (19,641 acres) of rubber plantations in the nation, the largest producer and exporter, have been damaged.
Rubber for September delivery in Shanghai gained 0.3 percent to 36,555 yuan ($5,595) a ton.
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