Rubber fell for the first time in three days as crude oil traded near a six-week low, reducing the appeal of the commodity as an alternative to synthetic products. The July-delivery contract dropped 1.7 percent to settle at 311.1 yen a kilogram ($4,086 a metric ton) on the Tokyo Commodity Exchange. Futures have gained 18 percent this year. Oil declined to the lowest level since Dec. 21 as U.S. crude stockpiles increased more than estimated and gasoline consumption fell to a 10-year low. Rubber was also sold as buying from China, the world’s largest consumer, failed to pick up after the week-long Lunar New Year holiday, said Ken Kajisa, an analyst at broker ACE Koeki Co. in Tokyo. “Data showing the strength of China’s economy eased speculation that the nation will ease monetary policy to support growth, leading to sales of futures,� he said by phone. “Lower oil is another drag on the price of rubber.� China’s manufacturing expanded last month on increased new orders, suggesting the economy is withstanding Europe’s debt crisis and a government-induced property slowdown at home. The manufacturing report cuts the need for aggressive policy easing, according to Fan Cheuk Wan, head of Asia-Pacific research at Credit Suisse Private Banking. “Demand from China is slow,� Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok. The market may regain ground soon as the low-production season has started in Thailand and will cut supplies, she said. The Thai cash price declined 1.6 percent to 124.30 baht ($4.02) a kilogram today, the Rubber Research Institute of Thailand said on its website. May-delivery rubber in Shanghai gained 0.2 percent to close at 27,335 yuan ($4,337) a ton. To contact the reporters 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: Richard Dobson at rdobson4@bloomberg.net

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