Rubber plunged to a 14-month low as a French-German split emerged over Europe’s rescue strategy, deepening concern the region may fail to contain debt crisis, hurting demand for raw materials. The March-delivery contract dropped as much as 6.6 percent to 281.7 yen a kilogram ($3,670 a metric ton), the lowest level since Aug. 17, 2010, before trading at 282.5 yen on the Tokyo Commodity Exchange at 12:09 p.m. local time. French President Nicolas Sarkozy flew to Germany to join the talks as leaders assembled in Frankfurt in an effort to narrow divisions before an Oct. 23 summit. Europe’s leaders are looking for ways to maximize the firepower of the 440 billion- euro ($605.5 billion) European Financial Stability Facility as the region’s debt crisis threatens to engulf Italy and Spain. “Risk aversion by investors increased after the split between Germany and France became clear,” Makiko Tsugata, a commodity analyst at research company Market Risk Advisory in Tokyo, said today by e-mail. The European Union is the largest user of natural rubber after China, consuming 1.1 million tons last year, according to the Singapore-based International Rubber Study Group. Asian stocks fell, oil dropped to a one-week low and copper declined for a fourth day after Luxembourg Prime Minister Jean- Claude Juncker, who chairs the group of euro-area finance ministers, indicated an impromptu meeting of European leaders in Frankfurt last night failed to resolve differences. The Fed’s Beige Book survey released yesterday showed companies reported more doubt about the recovery. ‘Pretty Nervous’ “We remain pretty nervous about Europe’s crisis because we have yet to see a concrete safety-net being established for the financial system,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. In the cash market, the benchmark Thai rubber price fell 2.3 percent to 127.10 baht ($4.15) a kilogram yesterday, according to the Rubber Research Institute of Thailand. Prices were pressured by the suspension of operations by the Thailand units of Honda Motor Co. and Toyota Motor Corp., the group said on its website. The Thai floods may disrupt auto production for at least a month and cost 23 billion yen in operating profit at Toyota, 11 billion yen at Honda Motor Co. and 6.25 billion yen at Nissan Motor Co., according to Kohei Takahashi, an analyst in Tokyo at JPMorgan Chase & Co. (JPM) In Shanghai, January-delivery rubber tumbled as much as 4.4 percent to 25,445 yuan ($3,991) a ton. To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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