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July 31 (Bloomberg) — Rubber booked the biggest monthly gain since December 2006 on renewed optimism that the world economy is recovering, spurring demand for the raw material.
Futures in Tokyo increased 21 percent this month after commodities jumped the most in more than four months yesterday on speculation that the worst of the global recession has passed and consumption of fuel, food and metals will rebound. Crude oil jumped 6.2 percent yesterday.
“Rubber got a boost from higher prices of crude oil and other commodities,” Hiroyuki Kikukawa, general manager of research at IDO Securities Co., said today by phone. Recent gains in stock markets also increased speculation that demand will rise from automakers, especially in China, he said.
January-delivery rubber gained as much as 6.4 percent to 196.5 yen a kilogram ($2,063 a metric ton) before settling at 195.5 yen on the Tokyo Commodity Exchange. The bourse suspended rubber trading for five minutes after the price increased by 10 yen a kilogram, triggering a circuit breaker system.
Rubber has gained 44 percent this year as global equities rallied and natural rubber exporters curbed shipments.
The MSCI Asia Pacific Index climbed 1.8 percent to 111.86 as of 3:58 p.m. in Tokyo. The benchmark has posted gains every month since March, the longest winning streak since July 2007. The Reuters/Jefferies CRB Index jumped 3.9 percent yesterday, the biggest gain since March 19.
Japanese manufacturers plan to boost production at least through August, easing concern a recovery that began with inventory restocking may fizzle.
Company Output
Companies said they aim to boost output 1.6 percent this month and 3.3 percent in August, a Trade Ministry report showed yesterday. The gain, led by makers of cars and steel, would follow an 8.3 percent increase in the three months ended June 30, the biggest quarterly advance in more than half a century.
Thailand, Indonesia and Malaysia, the largest rubber producers, may deepen a planned supply reduction this year as the recession curbs consumption, Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said July 26.
The three producing countries will cut shipments by as much as 48,000 tons a month in the second half, Latiff said July 15. The trio reduced 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 January delivery on the Shanghai Futures Exchange, the most-active contract, advanced 4.2 percent to 18,425 yuan ($2,697) a ton.
Source: Bloomberg