Jan. 24 (Bloomberg) -- Rubber dropped to the lowest level in a week after the International Monetary Fund cut its global growth forecast for 2013, raising concern demand for the commodity used in tires will falter.
The contract for delivery in June lost 0.3 percent to end at 307.3 yen a kilogram ($3,439 a metric ton) on the Tokyo Commodity Exchange, the lowest closing price since Jan. 17.
The world economy will expand 3.5 percent this year, less than the 3.6 percent forecast in October, the Washington-based agency said yesterday in an update of its World Economic Outlook report. Crude oil, used to make synthetic rubber, traded near the lowest level in a week in New York.
“The decline was because of the concern over slow economic growth,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co., said by phone from Tokyo. Buyers in China, the world’s largest user, may not accelerate purchases ahead of the Lunar New Year holidays next month as inventories are near the highest level in more than two years, he said.
Natural-rubber inventories stood at 101,330 tons on Jan. 17, according to the Shanghai Futures Exchange. That was 152 tons below the level on Jan. 10, the highest since March 2010.
Futures rose 0.6 percent earlier today after data showed manufacturing in China is expanding at the fastest pace in two years, Gu said. The preliminary reading of a Purchasing Managers’ Index was 51.9 in January, according to HSBC Holdings Plc and Markit Economics. That compares with the 51.5 final reading for December and the 51.7 median estimate of 17 analysts surveyed by Bloomberg News.
Rubber for delivery in May fell 1.7 percent to close at 25,640 yuan ($4,122) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board lost 1 percent to 97.55 baht ($3.27) a kilogram, according to the Rubber Research Institute of Thailand.
--Editors: Ovais Subhani, Thomas Kutty Abraham