Rubber Futures Drop Ahead of Japanese New Car Sales Report

By Aya Takada

Dec. 1 (Bloomberg) -- Natural rubber futures fell, erasing gains the past two days, on speculation a report today will show Japanese car sales last month tumbled 30 percent from a year ago.

Futures in Tokyo fell as much as 6.7 percent, extending a 25 percent slide last month. The latest decline in new car sales in Japan, the third-biggest rubber importer, could see annual sales drop to their lowest in 34 years, the Nikkei English News reported on Nov. 29. The Japan Automobile Dealers Association plans to release sales data today.

“I cannot expect any positive news from the auto industry,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd. in Tokyo, said today by phone. “Rubber prices will fall further as demand is weakening.”

Rubber for May delivery dropped 5.4 percent to 130.2 yen a kilogram ($1,365 a metric ton) on the Tokyo Commodity Exchange at the 11 a.m. local time break. Prices earlier fell to 128.4 yen.

Futures tumbled to 127.6 yen on Nov. 21, the lowest since January 2005, on concern production cuts by global carmakers will sap demand for natural rubber used in tires and other components. Prices reached a 28-year high of 356.9 yen on June 30.

March-delivery rubber on the Shanghai Futures Exchange, the most-active contract, fell 2 percent to 10,715 yuan ($1,564) a ton at 10:45 a.m. local time.

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net;