Rubber fell 21 percent to 238.9 yen on the Tokyo Commodity Exchange this year and is now 55 percent below the record 535.7 yen reached in February 2011. Lower prices should reduce costs for Bridgestone Corp., Michelin & Cie. and Goodyear Tire & Rubber Co., the biggest tiremakers.
The surplus will expand 57 percent to 490,000 metric tons this year, enough to meet U.S. demand for six months, according to RCMA Commodities Asia Group, the Singapore-based company that has traded rubber for nine decades. Futures in Tokyo, a global benchmark, will drop at least another 5.8 percent to 225 yen a kilogram ($2,369 a ton) by the end of December, according to the median of 16 analyst estimates compiled by Bloomberg. Five anticipate 200 yen, a price last seen in 2009.
Rubber production is expanding as trees planted from 2006 to 2008 become mature enough for tapping this year, said Kona Haque, an analyst at Macquarie Group Ltd. in London. Rubber rallied 23 percent in Tokyo in 2006 and 2007, encouraging more planting. Futures doubled in 2009.
Thailand, Malaysia and Indonesia also failed to extend their export curbs at a meeting in April. Tokyo futures had already plunged more than 20 percent from this year’s high of 337.8 yen in February by then. Officials from the International Tripartite Rubber Council met again June 12 and 13 without deciding on any new measures.