Rubber Plunges to a Four-Month Low on Greek Impasse

Rubber plunged to a four-month low as the political impasse in Greece raised speculation the nation may leave the euro, deepening an economic slump in the region and weakening demand for the commodity used in tires.

October-delivery rubber slumped as much as 5.1 percent to 265 yen a kilogram ($3,317 a metric ton), the lowest level for a most-active contract since Jan. 6, before trading at 268 yen on the Tokyo Commodity Exchange at 10:15 a.m. local time. Prices have trimmed this year’s advance to 1.7 percent.

The euro fell to an almost four-month low before a report forecast to show Europe’s economy contracted. Doubts mounted Greece can avoid an exit from the currency union as the region’s finance ministers meet for a second day in Brussels. Greece’s President will call a meeting of leaders of all parliamentary parties except for an ultra-nationalist party today to make the case for a government of prominent non-politicians.

“The European turmoil raised concerns the Chinese economic slowdown may worsen as the region is the biggest export market for China,” Ken Kajisa, an analyst at broker ACE Koeki Co. in Tokyo, said today by phone. China, the world’s largest auto market, is also the biggest rubber user.

China’s slowdown may deepen as policy makers unwind the excesses of a record credit boom while only gradually increasing stimulus, leaving 2012 growth at the weakest in 13 years, according to Pacific Investment Management Co.

Passenger-vehicle sales rose 1.9 percent in the first four months of the year, according to the China Association of Automobile Manufacturers. Auto demand rose 32 percent in 2010 after the government introduced subsidies and rebates to encourage buying, before slowing to 2.5 percent last year.

September-delivery rubber on the Shanghai Futures Exchange lost 2.4 percent to 24,270 yuan ($3,839) a ton at 9:23 a.m. local time. Thai rubber on a free-on-board basis dropped 0.6 percent to 117.25 baht ($3.74) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Rubber plunged to a four-month low as the political impasse in Greece raised speculation the nation may leave the euro, deepening an economic slump in the region and weakening demand for the commodity used in tires.

October-delivery rubber slumped as much as 5.1 percent to 265 yen a kilogram ($3,317 a metric ton), the lowest level for a most-active contract since Jan. 6, before trading at 268 yen on the Tokyo Commodity Exchange at 10:15 a.m. local time. Prices have trimmed this year’s advance to 1.7 percent.

The euro fell to an almost four-month low before a report forecast to show Europe’s economy contracted. Doubts mounted Greece can avoid an exit from the currency union as the region’s finance ministers meet for a second day in Brussels. Greece’s President will call a meeting of leaders of all parliamentary parties except for an ultra-nationalist party today to make the case for a government of prominent non-politicians.

“The European turmoil raised concerns the Chinese economic slowdown may worsen as the region is the biggest export market for China,” Ken Kajisa, an analyst at broker ACE Koeki Co. in Tokyo, said today by phone. China, the world’s largest auto market, is also the biggest rubber user.

China’s slowdown may deepen as policy makers unwind the excesses of a record credit boom while only gradually increasing stimulus, leaving 2012 growth at the weakest in 13 years, according to Pacific Investment Management Co.

Passenger-vehicle sales rose 1.9 percent in the first four months of the year, according to the China Association of Automobile Manufacturers. Auto demand rose 32 percent in 2010 after the government introduced subsidies and rebates to encourage buying, before slowing to 2.5 percent last year.

September-delivery rubber on the Shanghai Futures Exchange lost 2.4 percent to 24,270 yuan ($3,839) a ton at 9:23 a.m. local time. Thai rubber on a free-on-board basis dropped 0.6 percent to 117.25 baht ($3.74) a kilogram yesterday, according to the Rubber Research Institute of Thailand.