THE closely watched rubber inventory in China’s bonded warehouses in Qingdao jumped more than 11 percent in the past month to around 340,000 tons, three industry sources said yesterday, potentially capping gains on Tokyo futures.

    Rubber stocks in Qingdao, which make up the bulk of China’s inventory, stood at 339,900 tons Feb. 15, from 304,300 tons Jan. 15 and about 290,000 tons in December, as a plunge in tire grade prices spurred buying.

    The increase in inventory in the world’s largest rubber consumer also suggests speculators are still using the commodity as collateral for financing, where importers raise funds for more lucrative investments elsewhere.

    Stocks in Qingdao are not disclosed publicly, but dealers and analysts collect data on quantities from offices in the city.

    “The inventory is still very high, which will make the market more prone to downward pressure,” said an analyst in Tokyo, referring to rubber futures on the Tokyo Commodity Exchange, which have bounced in recent days from 17-month lows.

    “We can also see that Shanghai rubber futures have gone up to 16,000 yuan (US$2,639.17) a ton, but that I think is due to the high price of gold and other commodities,” the analyst said.

    The most active July contract on the Tokyo Commodity Exchange hit a high of 233.8 yen (US$2.30) a kilogram, its strongest since Jan. 30, buoyed partly as dealers reacted to a slight decline in rubber inventories monitored by the Shanghai Futures Exchange. (SD-Agencies)