Oct. 1 (Bloomberg) -- Rubber fell to the lowest level in six weeks on concern that the first U.S. government shutdown in 17 years will cut demand for the commodity used in tires.
The contract for March delivery on the Tokyo Commodity Exchange fell 1.8 percent to 260.9 yen a kilogram ($2,663 a metric ton), the lowest settlement since Aug. 21. Futures advanced rose 12 percent last quarter, the most since the period through December.
The U.S. government began a partial shutdown after lawmakers failed to forge an agreement in budget talks for the fiscal year that started at midnight. When the budget battle is resolved, U.S. politicians will move to the next fiscal dispute over raising the nation’s $16.7 trillion debt ceiling.
“We are concerned about the U.S. budget problem,” said Ryuta Imazeki, an analyst at Okachi & Co. in Tokyo. “If they can’t settle it, the shutdown could weaken consumption and slow down the U.S. recovery, which are negative for commodities.”
Futures earlier rose as much as 0.5 percent after Japan’s quarterly Tankan index of big manufacturers rose to 12 in September, the highest since 2007, exceeding the reading of 7 in a Bloomberg News survey. Japanese Prime Minister Shinzo Abe said today the nation will proceed with an increase in sales tax as planned and he will unveil the size of a package of stimulus measures later today.
Thai rubber free-on-board fell for a fifth day, losing 1.2 percent to 79.55 baht ($2.55) a kilogram today, according to the Rubber Research Institute of Thailand.
Markets in China are closed from today through Oct. 7 for National Day holidays.
--Editors: Brett Miller, James Poole