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Rubber extended a rally to an all- time high as persistent rain in Thailand, the top producer and exporter, lowered output, adding to worries over tightening supply ahead of low-production season early next year. The cash price in Thailand also reached a record.
May-delivery rubber on the Tokyo Commodity Exchange climbed as much as 1.2 percent to 400.1 yen per kilogram (4,794 a metric ton) before settling at 396.1 yen. The price has advanced 43.5 percent this year.
Shipments from Thailand decreased after heavy rainfall and flooding pared latex production, worsening a supply shortage as demand expands led by China, the largest user. Supply may drop as Thai farmers reduce tree-tapping during the so-called “wintering” season, said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo.
“Investors increased futures purchases on expectation that tightening supply will boost prices in coming months,” Saito said by phone today. “Manufacturers have no other options but to buy the raw material as they draw down inventories.”
The cash price in Thailand climbed to a record 141.05 baht a kilogram from 138.55 baht yesterday, the Rubber Research Institute of Thailand said on its website today.
“Investors remain worried over limited supply from top producers in Southeast Asia,” Chaiwat Muenmee, analyst at DS Futures Co., said today by phone from Bangkok.
Crude rubber stockpiles held at Japanese warehouses fell 7.6 percent to 6,816 tons at the end of last month, according to data from the Rubber Trade Association of Japan.
Tire Prices
Sumitomo Rubber Industries Ltd., the second-largest Japanese tiremaker, said it would increase product prices in overseas markets by as much as 15 percent from January because of record prices.
The announcement came after Bridgestone Corp., the world’s largest tiremaker, said last week it would raise Japanese prices of truck and bus tires by an average of 7 percent in March.
China’s sales of passenger cars including multipurpose and sport-utility vehicles increased 29.3 percent to 1.34 million last month, higher than the previous record of 1.32 million in January, according to the China Association of Automobile Manufacturers. The pace of growth was the fastest since April.
Car sales in India rose 21 percent to 161,497 units last month, according to the Society of Indian Automobile Manufacturers. Rubber deficit in the country, the second-largest consumer, may widen to 840,000 tons in 2020 from 175,000 tons next year, Vinod Simon, president of the All India Rubber Industries Association, said this month.
May-delivery rubber in Shanghai rose as much as 1.9 percent to a one-month high of 35,990 yuan ($5,408) a ton before closing at 35,535 yuan. The contract climbed to a record 38,920 yuan on Nov. 11.
Source: Bloomberg