RUBBER has declined to a one-week low as cash crunch or the “Shibor shock” in China, the world’s biggest consumer for rubber, is affecting the auto sector, according to a report from Bloomberg.
Rubber for delivery in December on the Tokyo Commodity Exchange dropped 3% to 234.3 yen a kg (US$2,316 a metric tonne), the lowest level for a most-active contract since July 1. Futures traded at 236.8 yen at 10:37 a.m. local time and have lost 22% this year.
China’s slow demand for cars and vehicles, in the light of a cash crunch and limited access to financing, has caused a stir amongst auto dealers, according to a local automobile association.
China’s inflation remained subdued in June while a decline in factory-gate prices extended its longest streak in a decade, underscoring weaker demand in an economy that probably decelerated for a second quarter.
Rubber for January delivery on the Shanghai Futures Exchange stood US$2,804 a tonne.