Money

Rubber slumps as strength of dollar cuts appeal

(China Daily)
Updated: 2010-10-28 10:07

TOKYO - Rubber slumped on concern that China may tighten trading rules to curb excessive speculation, and as a stronger dollar reduced the appeal of commodities as alternative assets.

Related readings:  Rubber climbs  Rubber at 5-week high  Rubber at 2-week high  Rubber rises to new high

The April-delivery contract declined on Wednesday as much as 1.4 percent to 335.7 yen a kilogram ($4,107 a ton) on the Tokyo Commodity Exchange before settling at 337 yen. Shanghai futures plunged on Wednesday as much as 4.4 percent to 31,210 yuan ($4,669) a ton after reaching a record 33,320 yuan on Tuesday.

Commodities in China snapped a rally as the Zhengzhou Commodity Exchange on Tuesday increased the margin requirement for rice, rapeseed oil, wheat and sugar trading to 8 percent from 3 percent or 4 percent.

"Rubber came under pressure amid speculation that China may be attempting to cap raw materials prices to curb inflation," Shuji Sugata, research manager at Mitsubishi Corp Futures Ltd in Tokyo, said on Wednesday.