By Aya Takada
Jan. 8 (Bloomberg) -- Natural rubber futures dropped to the lowest level in more than a week after oil booked the biggest slump in seven years yesterday, reducing the cost of making rival synthetic products.
Prices in Tokyo, down for a second day, fell as much as 7.2 percent to the lowest since Dec. 30. Crude oil in New York plunged 12 percent yesterday as a U.S. government report showed bigger-than-expected gains in supplies.
“A slump in oil was the biggest factor triggering sales of rubber futures,” Jun Nishimuta, an analyst at Kanetsu Asset Management Co. in Tokyo, said today by phone.
Rubber for June delivery, the most-active contract, fell 3.8 percent to settle at 143.1 yen a kilogram ($1,558 a metric ton) on the Tokyo Commodity Exchange.
Losses were pared on expectations that producers will cut production amid a global recession, Nishimuta said.
Output in Thailand, the world’s largest exporter, may drop to 3.08 million tons this year from 3.12 million tons last year, with shipments probably falling 1.9 percent to 2.55 million tons, according to a report by the farm ministry yesterday.
Vietnam, the world’s fourth-largest rubber exporter, will cut sales by as much as 200,000 tons, taking the combined reduction by the four largest producers to 1.1 million tons, the Vietnam Rubber Association said Jan. 5 on its Web site.
Rubber futures reached a six-year low of 99.8 yen on Dec. 5, plunging 72 percent from the 28-year high reached on June 30, as the recession forced carmakers to reduce output, cutting tire demand. U.S. auto sales plunged 36 percent in December, dragging the industry’s annual volume to a 16-year low.
May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, fell 0.9 percent to close at 12,030 yuan ($1,760) a ton.
To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net
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