BLBG:Rubber Declines, Paring Weekly Gain, as U.S. Data Raise Growth Concerns
Rubber declined, paring a fourth weekly advance, after new homes sales unexpectedly fell in the U.S. and jobless benefit claims increased, raising concerns about the strength of the economic recovery.
The July-delivery contract dropped to as low as 316.4 yen a kilogram ($4,087 a metric ton) before trading at 317.3 yen on the Tokyo Commodity Exchange at 11:39 a.m. local time. The most- active contract has gained 0.9 percent this week and 21 percent this year.
A U.S. report showed that sales of new homes declined in December for the first time in four months. Claims for U.S. jobless benefits rose last week. The dollar declined against the Japanese currency, cutting the appeal of yen-denominated contracts.
“Rubber was ripe for profit-taking after sharp gains this month,” Ken Kajisa, an analyst at broker ACE Koeki Co. in Tokyo, said by phone today. “It came under pressure as the U.S. data failed to add positive incentives.”
Futures were also sold amid speculation that purchases by China, the world’s largest consumer, may lose steam on high prices and uncertainty about car sales growth, he said. China’s auto sales slowed last year after the government ended stimulus measures and as the nation’s economic expansion eased.
The Thai cash price gained 2.4 percent to 128 baht ($4.09) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The Shanghai market closed this week for the Lunar New Year holidays.
The government of Thailand, the biggest producer and exporter, approved a plan to buy 200,000 tons of rubber, targeting a local price of 120 baht a kilogram.
To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
