Rubber declined on concern that demand may weaken after Toyota Motor Corp., the world’s largest automaker, extended production cuts in some regions because of a parts shortage triggered by Japan’s record quake last month.
The September-delivery contract dropped as much as 3.4 percent to 411.3 yen per kilogram ($5,001 a metric ton) and ended at 412.3 yen on the Tokyo Commodity Exchange. Rubber surged yesterday on concern that supply from Thailand, the largest producer, may be disrupted by floods and rain, and an industry group has forecast that output this year may decline.
Toyota’s North American unit said yesterday that plants will remain shut on Mondays and Fridays and run at 50 percent on the three other weekdays until June 3. Toyota will also shut U.S. plants for a week from May 30 and in Canada from May 23.
“Toyota’s plan to cut production raised concerns that the car market this year may shrink,” Pornthip Wongjirattikarn, marketing manager at Future Agri Trade Co., said by phone from Bangkok. “This would slow demand for rubber.”
In China, the utilization rate at Toyota’s factories will generally be 50 percent of normal and may fall as low as 30 percent from April 21 to June 3, it said in a statement. Japan was rocked by its biggest recorded quake on March 11, triggering power cuts that shuttered factories.
A strengthening Japanese currency also hurt the rubber market, Ker Chung Yang, an analyst at Phillip Futures Pte, said from Singapore. Still, the low-production season, when output falls in top growers, helped to stem declines, he said.
The yen gained to 82.17 per dollar from 82.56 yesterday before a report forecast to show U.S. house prices fell for a fourth month, underscoring prospects the Federal Reserve will maintain monetary stimulus. A stronger Japanese currency boosts the costs of yen-based contracts for holders of other currencies.
China Imports
Rubber imports by China declined 4.6 percent to 470,000 tons in the first quarter compared with the year-earlier period, Beijing-based China Customs General Administration said today.
Rubber for September delivery in Shanghai fell 1.1 percent to close at 34,510 yuan ($5,294) a ton after rising as much as 1.1 percent earlier.
The physical price of Thai rubber was unchanged at 177.05 baht ($5.90) per kilogram, according to the Rubber Research Institute of Thailand. Chinese buyers continue to delay purchases, waiting for prices to drop, it said.
Thai rubber output may decline from last year if rains that caused floods persist, according to the Thai Rubber Association. Production may be 3.2 million tons this year, said Luckchai Kittipol, president of the group. That compares with last year’s 3.25 million tons and an earlier 2011 target of 3.49 million.
Unseasonal rains from the start of this year in Thailand caused floods in 10 southern provinces in March that may have damaged about 50,000 rai (19,641 acres) of rubber plantations, according to the Department of Disaster Prevention & Mitigation. Water levels have since receded, it said.
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