Dec. 18 (Bloomberg) -- Rubber futures in Tokyo dropped for a second day as rising stockpiles in China and Japan signaled slow demand for the commodity used in tires.
The contract for delivery in May on the Tokyo Commodity Exchange fell 0.4 percent to end at 280.1 yen a kilogram ($2,720 a metric ton), extending losses this year to 7.4 percent.
Rubber inventories in Qingdao, China’s main hub for the material, advanced for a third week to 282,700 tons from 276,300 tons at the end of November, according to the Qingdao International Rubber Exchange. Crude rubber stockpiles held at Japanese warehouses rose 17 percent to 10,875 tons on Nov. 30, the highest since July 10, data from the Rubber Trade Association of Japan show.
“Stocks in Qingdao and Japan are at high levels, raising concerns the demand for rubber will slow ahead of holiday seasons,” said Megumi Saito, trader at commodity broker Yutaka Shoji Co. Some investors have reduced positions while waiting for a Federal Reserve decision on its monthly stimulus program.
The Fed may begin cutting economic stimulus at its meeting today, according to 34 percent of economists in a Dec. 6 Bloomberg survey, up from 17 percent in a Nov. 8 poll.
The contract for May delivery on the Shanghai Futures Exchange lost 1.3 percent to close at 19,150 yuan ($3,154) a ton. Thai rubber free-on-board dropped 0.6 percent to 82.85 baht ($2.57) a kilogram today, according to the Rubber Research Institute of Thailand.
--Editors: Sungwoo Park, Jarrett Banks