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Rubber advanced for a second day, climbing to the highest level since April 30, as increased car sales in Japan and limited supply from Thailand boosted the appeal for the commodity used to make tires.
Futures climbed as much as 1.9 percent, completing a second weekly increase, after the Nikkei newspaper reported that new car sales in Japan from Aug. 1 to Aug. 23 surged 73 percent from the same period last year to more than 149,000.
Sales increased as consumers sought to benefit from a government subsidy program for fuel-efficient cars, which is scheduled to finish at the end of September, said Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co. Demand for rubber and other raw materials used in cars may be sustained at least until the program expires, he said.
“Consumers are advancing car purchases to take advantage of the subsidy program, which appears to have had a positive impact on raw-material demand,” Saito said today by phone.
The February-delivery contract rose as high as 299.7 yen per kilogram ($3,537 a metric ton) before settling at 298.9 yen on the Tokyo Commodity Exchange.
“A key driver today is limited supply as rainfall continues in southern Thailand,” the main production area of the largest exporter, Chaiwat Muenmee, an analyst at Bangkok- based DS Futures Co., said by phone today.
Cash prices in Thailand gained 0.2 percent to 105.85 baht ($3.36) per kilogram, driven by limited availability and demand from processors, the Rubber Research Institute of Thailand said yesterday. Some buyers have built up stockpiles before a new levy on Thai exports take an effect, the institute said.
A higher levy on Thai exports ranging from 0.9 baht to 5 baht a kilogram, based on a sliding scale of free-on-board prices, will take effect from Oct. 1, replacing the existing levy that ranges from 0.9 baht a kilo to 1.4 baht.
Heavy rainfall is likely across Thailand until the end of August, according to the Thai Meteorological Department. Rain disrupts tapping, leading to lower output.
January-delivery rubber on the Shanghai Futures Exchange gained 0.4 percent to close at 25,630 yuan ($3,770) a ton.
Source: Bloomberg