TOKYO, April 6 (Reuters) – Key Tokyo rubber futures extended their gains on Monday to end up 3.7 percent at their highest close in nearly five months after briefly topping 170 yen, as buying gained momentum on solid oil prices and a weaker yen.
* A rise in car sales last month in Germany offered hope to the rubber market, but traders said the uncertain fate of ailing U.S. automakers still gave cause for caution.
* The key Tokyo Commodity Exchange rubber contract for September delivery <0#JRU:> finished the day at 169.9 yen per kg, up 6.1 yen or 3.7 percent, the highest finish for the lead contract since Nov. 17. The intra-day high was 170.2 yen.
* The lead contract has gained about 12 percent since the current rally started on March 31.
* “Rubber prices are rising as the pace of the yen’s fall has been faster than previously thought and oil prices are holding steady around $50,” said a trader at a Japanese trading house.
* “With the German news, some people are seeing that the price decline over the past few months has been overdone. But the hurdle for a sustained market rally remains, given that the fate of GM is not finalised yet,” he said.
* U.S. automaker General Motors Corp will move quickly into bankruptcy if necessary, Chief Executive Fritz Henderson said in an interview with the Financial Times newspaper published on Friday. The company warned there is a growing risk it could file for bankruptcy by June as it has 60 days to reach deeper concessions with bondholders and unions after its previous restructuring plan was rejected by the U.S. government. [ID:nL3241831]
* Germany will extend incentives aimed at encouraging people to scrap old cars and buy new, fuel-efficient vehicles, though the subsidies are likely to be reduced, ruling party sources said on Thursday. [ID:nL2361359]
* German car sales jumped 40 percent in March thanks largely to the government incentives, data showed last week. [ID:nL2696446]
* Asian physical rubber prices were little changed on Monday as traders carefully eyed the fate of GM amid growing optimism about the global economy, which has boosted stock markets.
* “The major producers, Thailand, Indonesia and Malaysia, are keeping a tight grip on supplies, not offering more than necessary as they remain sceptical about some optimism over recovering demand for autos,” the trader said.
* The U.S. dollar was up 0.5 percent against the yen, with the weaker yen helping to inflate yen-based rubber prices. [USD/]
* Oil prices rose above $53 a barrel on hopes for a recovery in the global economy. [O/R]

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH FRIDAY
Grade Price Change
Thai RSS3 (May) $1.56/kg unchanged
Thai RSS3 (Jun) $1.56/kg unchanged
Thai STR20 (May) $1.54/kg unchanged
Thai STR20 (Jun) $1.54/kg unchanged
Malaysia SMR20 (May) $1.54/kg unchanged
Malaysia SMR20 (Jun) $1.54/kg unchanged
Indonesia SIR20 (May) $0.65/lb unchanged
Indonesia SIR20 (Jun) $0.65/lb unchanged
Thai USS3 50.0 baht/kg unchanged
Thai 60-percent latex (drums, May) $1,300/tonne unchanged
Thai 60-percent latex (bulk, May) $1,200/tonne unchanged

Source: Reuters

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