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Rubber advanced on speculation that demand from China, the largest consumer, will expand after data showed the nation’s manufacturing growth accelerated.
Futures in Tokyo climbed as much as 1.4 percent, extending August’s 7.7 percent gain, the best performance since February. Prices also increased as Japan’s currency fell against the dollar, raising the appeal of yen-denominated contracts.
China’s manufacturing expanded at a faster pace in August after the weakest growth since February 2009 the previous month, a government-backed survey of purchasing managers showed today. Asian equities gained, led by commodity companies, as the survey boosted investor appetite for riskier assets.
“Rubber was supported by speculation that China’s demand will keep expanding as its economy still shows strength, despite the slowing U.S. recovery,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today by phone.
February-delivery rubber gained as much as 4.2 yen to 298 yen a kilogram ($3,528 a metric ton) before settling at 296.8 yen on the Tokyo Commodity Exchange.
China’s Purchasing Managers’ Index rose to 51.7 from 51.2, the Federation of Logistics and Purchasing said on its website today. The reading was more than the median 51.5 forecast in a Bloomberg News survey of 17 economists. A level of more than 50 indicates expansion.
“Asian growth is still much better than the rest of the world,” said Manpreet Gill, Singapore-based Asian strategist at Barclays Wealth, which has $229 billion in assets.
The MSCI Asia Pacific Index of stocks gained 0.6 percent. The yen dropped to 84.44, from 84.20 in New York yesterday.
Cash Market
In the cash market, auctioned prices of smoked sheet rubber gained 0.3 percent to 105.92 baht ($3.40) per kilogram, boosted by demand from processors and limited supply from Thailand, according to the Rubber Research Institute of Thailand.
“Supply from Thailand is quite low during this monsoon season, while overseas demand continues coming in,” Sureerat Kunthongjun, an analyst at AGROW Enterprise Ltd., said by phone from Bangkok. “Some investors expressed concerns over supply from Indonesia after the volcano eruption,” she added.
Prices were also supported by speculation that supply from Indonesia, the second-largest producer, may be disrupted because of the eruption of the Sinabung volcano on Sumatra. The volcano erupted on Aug. 29 for the first time in 400 years, prompting the evacuation of surrounding areas.
January-delivery rubber on the Shanghai Futures Exchange gained 1.4 percent to close at 25,680 yuan ($3,770) a ton.
Source: Bloomberg