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July 21 (Bloomberg) — Rubber jumped by as much as 4.1 percent to the highest in 10 weeks amid optimism the global economy may be recovering, increasing raw material demand.
Futures in Tokyo advanced to the highest since May 11, extending last week’s 8.3 percent gain. Asian stocks climbed after Goldman Sachs Group Inc. raised its estimate for the U.S. Standard & Poor’s 500 Index on improving earnings, and a gauge of economic indicators increased in June.
“Investors bought rubber futures on optimism an economic recovery will boost demand,” Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today by phone.
Natural rubber for December delivery, the most-active contract, gained 2.4 percent to settle at 174.6 yen a kilogram ($1,858 a metric ton) on the Tokyo Commodity Exchange. Earlier, the price rose as much as 6.9 yen to 177.4 yen.
The MSCI Asia Pacific Index added 1.4 percent to 106.25 as of 4:04 p.m. Tokyo time, headed for a sixth straight gain.
The Conference Board’s gauge of the U.S. economic outlook for the next three to six months increased 0.7 percent, more than forecast, after a revised 1.3 percent gain in May, the New York-based research group said yesterday. It is the first time the index has climbed for three consecutive months since 2004.
Chinese Demand
Rubber futures also advanced on speculation that China, the world’s largest consumer, may step up purchases to meet growing demand from tiremakers, Shigemoto said.
China’s sales of cars and other passenger vehicles surged 48 percent to 872,900 last month, the China Association of Automobile Manufacturers said on July 9. That was the biggest jump since February 2006 as government stimulus spending spurred a revival in the world’s third-largest economy.
Rubber inventories monitored by the Shanghai Futures Exchange rose 3,275 tons to 46,795 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said July 17.
“It appears China was restocking the raw material to raise tire output,” Shigemoto said. “Chinese demand may tighten rubber supply as producers continue export curbs.”
Thailand, Indonesia and Malaysia will reduce shipments by as much as 48,000 tons a month in the second half, Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said July 15. The trio cut exports by 540,000 tons in the first five months of the year, more than the 414,000 ton reduction planned for the first half, he said.
Rubber for November delivery on the Shanghai Futures Exchange, the most-active contract, lost 1 percent to 16,490 yuan ($2,414) a ton.
Source: Bloomberg