Natural rubber futures in Tokyo fel as much as 4.5 percent, the biggest fluctuation of any commodity today, on speculation increased production in Thailand will bolster supplies.
Thailand, the world's biggest supp;ier of the commodity, is tapping more rubber trees to expand production, spurred by prices that climbed as much as 47 percent to 192.2 yen ($1.73) a kilogram this year in Tokyo on soaring tire output in China. Thai rubber production rose 8.1 percent in June from a year earlier, the central bank said on its Wed site.
"Thai production is increasing while the tightness in supply is easing," said Shusaku Matsumura, a commodities analyst at Tokyo Comwealth Inc. in Tokyo. "Rubber should continue to fall, and may reach 165 yen next week."
Natural rubber for delivery in January fell as much as 8 yen to 169.5 yen a kilogram on the Tokyo Commodity Exchange, the world's largest rubber futures market. That's the lowest for a most-active contract since July 8. The futures traded down 3.7 percent at 170.9 yen at 12.52 p.m. Tokyo time.
Rubber prices reached the highest in at least 16 years on July 26, ratcheting costs for Brigestone Corp., Michelin & Cie, Goodyear Tire & Rubber Co. and other tire makers.
Goodyear said yesterday raw material costs incrreased about $133 million in the last quarter and are expected to grow 10 percent this year. Cooper Tire & Rubber Co., the second-biggest U.S. tiremaker, said Aug. 2 that higher raw material costs will lower operating profit by $35 million to $40 million this quarter.
In China, the world's biggest rubber-consumer, stockpiles of deliverable supplies have dwindled 91 percent the past year in warehouse monitored by the Shanghai Stock Exchange as automakers snap up supplies to meet demand for new vehicles, sales of which climbed 9.4 percent to 2.79 million units in the first half.
The tire industry is the biggest consumer of rubber. Higher prices for synthetic rubber have caused the natural commodity to boost its share of the total global rubber market to 41 percent from 39 percent the past three years, according to the International Rubber Study Group in London.
Price in Thailand fell yesterday for the second straight day. Auction prices for benchmark ribbed smoked sheet rubber were at 67.2 baht ($1.63) a kilogram at the central rubber market in Songkhla province yesterday.
Thai rubber production rose to 292,000 tons in June, from 270,000 tons in the same month a year earlier, the central bank said, citing data from farm monistry's Rubber Research Institute.
Production this year is forecast to rise 5.9 percent to 3.14 million tons, the agriculture ministry's Office of Agricultural Economics said on its Wed site.
A futures contract is an agreement to buy or sell a commodity at a specified price and date. The world's biggest movers are based on changes in price or yield and are screened for the size of the market and amount of daily trading.
