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Rubber futures climbed to a record, taking gains this year to 50 percent, on speculation that rising tire demand and supply disruptions from wet weather may worsen a shortage. The cash price also surged to an all-time high.
May-delivery rubber advanced as much as 1.2 percent to 413.8 yen per kilogram ($4,944 a metric ton) on the Tokyo Commodity Exchange, and settled at 413.1 yen. This year’s jump extends 2009’s rally, when prices more than doubled.
Auto sales in China may beat the U.S. for a third straight year in 2011 as the world’s largest carmakers Toyota Motor Corp., General Motors Co. and Volkswagen AG estimate sales will grow by as much as 15 percent. In Thailand, the northeast monsoon will likely bring rains to southern provinces in the second half of December, while heavy rains are expected across Indonesia, according to local meteorological offices.
“Fundamentally, rubber will likely extend rallies,” Varut Rungkhum, an analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok today. There are “worries over a supply shortage as rains may continue until early next year when the low-production period kicks in,” Varut said.
The Thai cash price advanced 1.7 percent to 146.55 baht ($4.86) per kilo today, according to the Rubber Research Institute of Thailand. The gain was fueled by demand ahead of New Year holidays, while supplies from Thailand, Indonesia and Malaysia are inadequate, the institute said on its website.
Production in Thailand, the biggest grower, may plunge 28 percent in the three months to Dec. 31 from a year ago as a La Nina weather pattern causes unusually heavy rain in the south, the Association of Natural Rubber Producing Countries has said. The southern provinces account for 80 percent of Thai output.
Chinese Demand
Auto sales in China may reach 20 million units next year, according to Booz & Co. and Nomura Holdings Inc. analysts. GM, the biggest foreign automaker in China, expects sales to grow as much as 15 percent, China President Kevin Wale said yesterday. Volkswagen, Europe’s largest carmaker, projects China’s markets will rise 10 to 15 percent, according to Soh Weiming, the company’s local executive president.
Auto demand in China may grow even as the government ends incentives this month that helped boost sales 34 percent to 16.4 million through November. Light-vehicle sales in the U.S. may be as much as 12.8 million units, said Ashvin Chotai, managing director of Intelligence Asia Automotive, a consultant.
Rubber was “also supported by high crude oil prices,” Ker Chung Yang, an analyst at Phillip Futures Pte., said by phone from Singapore. Costlier crude can boost natural-rubber prices as the rival, synthetic product is made from naphtha.
Crude oil traded near the highest level in two weeks on speculation that economic growth in the U.S. will accelerate next year, bolstering demand. Crude for February delivery rose as high as $89.77 a barrel in New York from $88.81 yesterday.
May-delivery rubber in Shanghai gained as much as 1.2 percent to 37,760 yuan ($5,669) a ton before closing at 37,685 yuan. The contract climbed to a record 38,920 yuan on Nov. 11.
Source: Bloomberg