Rubber in Tokyo fell for a third day and reached the lowest level in more than a month amid concern that demand may weaken in China, the largest consumer.

The contract for delivery in June on the Tokyo Commodity Exchange fell as much as 1.6 percent to 258.3 yen a kilogram ($2,477 a metric ton), the lowest level since Nov. 28, before trading at 258.8 yen at 11:35 a.m. Futures have lost 5.7 percent in the past two days, heading for the largest drop since June.

China’s Cabinet imposed new controls on the multi-trillion-dollar shadow-banking industry with an order that targets off-the-books loans and shores up enforcement of current rules, two people familiar with the matter said. The Shanghai (SHCOMP) Composite Index extended losses for a fourth day on concerns that liquidity is shrinking.

“A sell-off in the Chinese market dragged down futures in Tokyo,” said Hideshi Matsunaga, an analyst at Evolution Japan Co., a broker in Tokyo.

Stockpiles monitored by the Shanghai Futures Exchange rose 0.9 percent to 176,027 tons, the highest level since November 2004, data from the bourse showed last week.

The contract for May delivery on the Shanghai exchange slid as much as 1 percent to 17,065 yuan ($2,819) a ton, the lowest level since July 10. Futures tumbled 4.4 percent in the four days through Jan. 3.

Rubber free-on-board in Thailand fell 1.2 percent to 80.65 baht ($2.44) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: http://www.bloomberg.com