(Updates with settlement price in second paragraph.)
May 7 (Bloomberg) -- Rubber futures in Tokyo fell the most in more than three months and reached the lowest settlement since 2009 after the yen rallied and concern mounted that demand would ease in China.
The contract for delivery in October on the Tokyo Commodity Exchange slumped 4.9 percent to 197.2 yen a kilogram ($1,943 a metric ton), the lowest close for a most-active contract since Sept. 30, 2009. It was the biggest daily loss since Jan. 27.
Rubber has retreated 28 percent this year amid economic expansion in China, the biggest user of the commodity, that’s forecast to drop to the slowest pace since 1990. The country’s manufacturing contracted in April for a fourth month, according to a survey released May 5 by HSBC Holdings Plc and Markit Economics. Trading in Tokyo futures, the global benchmark for rubber, resumed today after a two-day holiday.
“The manufacturing data dealt a heavy blow to the market,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by telephone. “Concerns deepened that demand from China may weaken.”
The Japanese currency climbed to a three-week high against the dollar today, cutting the appeal of yen-denominated futures, as escalating violence in Ukraine boosted demand for assets in the Asian economy as a haven. The U.S. urged Ukraine to proceed with its May 25 presidential election, rejecting Russia’s calls to postpone the vote.
Rubber in Tokyo fell into a bear market on Jan. 28 as inventories in China climbed to a nine-year high, raising the prospect of a deepening global glut for the commodity used to make tires. Vehicle demand in China, the world’s largest car market, has slowed as anti-pollution and austerity campaigns spread.
Rubber for delivery in September on the Shanghai Futures Exchange was little changed at 14,090 yuan ($2,266) a ton. Futures touched 13,755 yuan on April 23, the lowest level since 2009.
Thai rubber free-on-board lost 2.6 percent to 64.65 baht ($2) a kilogram amid concern over a glut, Saito said.
A global rubber surplus this year will be 78 percent more than estimated in December, according to The Rubber Economist Ltd. The excess is estimated at 652,000 tons in 2014, compared with 366,000 tons predicted in December, as demand slows and output in the largest grower, Thailand, surpasses forecasts, according to the London-based industry adviser.
The Singapore-based International Rubber Study Group said the glut is set to exceed last year’s 714,000 metric tons.