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Aug 4: Rubber Jumps 3.4% as Auto Sales Boost Optimism Demand Will Grow

Aug. 4 (Bloomberg) — Rubber climbed for a fourth day after U.S. auto sales posted their best month this year, raising optimism the vehicle industry’s worst drop in three decades may be over.

Prices for the commodity used in tires gained as much as 3.4 percent in Tokyo to the highest since Nov. 5. The annual auto sales pace in the U.S. in July increased to 11.2 million, according to data yesterday from Autodata Corp.

“Improvement in the U.S. and Japanese auto sales raised optimism rubber demand will increase,” Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co., said today in a telephone interview.

January-delivery rubber gained as much as 6.6 yen to 202.9 yen a kilogram ($2,126 a metric ton) before settling at 196.7 yen on the Tokyo Commodity Exchange. The commodity has gained 45 percent this year.

Ford Motor Co.’s July U.S. sales expanded 2.3 percent, while Toyota Motor Corp. had its smallest U.S. sales drop this year. The results may signal the start of a recovery for the industry, which struggled as average U.S. gasoline prices rose to a record in mid-2008 and tight credit and unemployment sapped demand.

Toyota, the world’s largest automaker, narrowed today its full-year net loss forecast to 450 billion yen ($4.7 billion) from 550 billion yen, as government stimulus measures boost demand in its largest markets.

“Concern is easing that a drop in car sales in the U.S. and Japan may outpace an increase in sales in China and India,” Saito said. “Rubber may climb further if China’s auto data turn out to be strong again this month.”

China Sales

China’s passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as tax cuts and government subsidies helped the nation extend its lead over the U.S. as the world’s largest auto market this year.

Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said on July 9. Overall vehicle sales, which include buses and trucks, rose 36 percent to 1.14 million.

Rubber for January delivery on the Shanghai Futures Exchange, the most-active contract, lost 1 percent to 18,770 yuan ($2,748) a ton.

Source: Bloomberg

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