Oct. 10 (Bloomberg) -- Rubber dropped from the highest level in more than a week after oil in New York traded near a three-month low, cutting the appeal of the commodity as an alternative to synthetic products.
The contract for March delivery on the Tokyo Commodity Exchange lost 2 percent to 259.4 yen a kilogram ($2,642 a metric ton), retreating from yesterday’s settlement that was the highest since Sept. 30. The most-active contract lost 14 percent this year.
West Texas Intermediate traded near the lowest settlement since July 3 after a government report showed U.S. crude inventories grew the most in a year. U.S. politicians remained deadlocked over raising the government’s borrowing limit, adding to concern that the country will not meet its debt obligations.
“The turmoil sapped investor appetite for commodities,” said Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo. “Rubber tracked losses in oil and metals amid concern the government shutdown may slow the U.S. recovery.”
The U.S. shutdown has interrupted the flow of government data the Fed uses to evaluate the health of the economy, from factory orders to trade and unemployment. It also threatens to curtail economic growth after as many as 800,000 government workers were furloughed.
Rubber for January delivery on the Shanghai Futures Exchange lost 1.2 percent to 20,300 yuan ($3,319) a ton. Thai rubber free-on-board fell 0.3 percent to 79.25 baht ($2.52) a kilogram today, according to the Rubber Research Institute of Thailand.
--Editors: Jarrett Banks, Jake Lloyd Smith