rubber news-Rubber Slumps Most in a Month as Economic Recovery May Falter

Rubber Slumps Most in a Month as Economic Recovery May Falter
Nov. 2 (Bloomberg) -- Rubber slumped by the most in a month as a drop in U.S. consumer spending and the bankruptcy of CIT Group Inc. stoked concern that an economic recovery may falter, curbing demand for the commodity used in tires.
Futures in Tokyo fell as much as 3.4 percent, the largest loss since Sept. 24. New-York based CIT, a 101-year-old commercial lender, filed for bankruptcy on Nov. 1 to cut $10 billion in debt after the credit crunch dried up its funding and a U.S. bailout and debt exchange offer failed. Americans cut spending 0.5 percent in September, the first decline in five months, the Commerce Department reported Oct. 30.
“Investors reduced holdings of equities and commodities as they question a rosy scenario that global economic growth may accelerate,” Kazuhiko Saito, chief analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. “Rubber was sold together with oil and other industrial commodities.”
April-delivery rubber fell as much as 7.9 yen to 223.4 yen a kilogram ($2,483 a metric ton) on the Tokyo Commodity Exchange before trading at 223.8 yen at 10:17 a.m. local time. Prices gained 18 percent last month, the largest increase since July.
CIT, which filed the fifth-largest bankruptcy by assets, said it plans to exit quickly due to support from bondholders, who voted in favor of a so-called prepackaged plan. CIT listed $71 billion in assets and $64.9 billion in debt in a Chapter 11 filing in U.S. Bankruptcy Court in Manhattan.
Equities Decline
Asian stocks dropped, extending a 2.8 percent decline in the Standard & Poor’s 500 Index Oct. 30.
“People are starting to have doubts the U.S. recovery will continue,” said Tomochika Kitaoka, chief strategist in Tokyo at Mizuho Financial Group Inc.
Futures were also sold as a drop in crude oil to a two-week low cut the appeal of the commodity as an alternative to its synthetic rival made from petroleum, Saito said.
December-delivery crude fell as much as 44 cents, or 0.6 percent, to $76.56 a barrel in after-hours electronic trading on the New York Mercantile Exchange, its lowest intraday price since Oct. 15. It traded at $76.86 at 10:22 a.m. in Tokyo.
January-delivery rubber on the Shanghai Futures Exchange lost 2.1 percent to 18,940 yuan ($2,774) a ton at 9:23 a.m. local time.
Prices fell after the Shanghai exchange reported Oct. 30 that natural rubber stockpiles monitored by the bourse rose 6,230 tons to 116,913 tons, the highest level since November, 2004.