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Dec. 8 (Bloomberg) — Rubber increased on speculation record China car-sales may boost demand from the world’s biggest user, and as cash prices in Thailand climbed to the highest ever.
May-delivery rubber on the Tokyo Commodity Exchange gained 0.3 percent to settle at 377.2 yen per kilogram ($4,492 a metric ton). The price reached a 30-year high of 383 yen on Nov. 11 and has gained 37 percent this year.
China’s passenger car sales jumped to a record in November, climbing 27 percent from a year ago, the China Daily reported, citing the China Passenger Car Association. Physical rubber prices in Thailand, the world’s largest producer and exporter, increased 1.1 percent from yesterday to a record, according to the Rubber Research Institute of Thailand.
“Chinese demand for physical rubber remains strong, supporting the futures prices,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today by phone. “Strong Thai prices indicate China may be stepping up purchases.”
The cash rubber price climbed to a record 137.05 baht ($4.54) per kilogram from 135.55 baht yesterday, the institute said on its website. Supply is tight as output in Thailand and other Asian producers was reduced by heavy rain and flooding, Tasaka said.
Prices will remain “strong” next year as global consumption increases faster than supply, according to Pongsak Kerdvongbundit, managing director of Von Bundit Co., Thailand’s largest exporter.
Passenger car sales in China, the largest auto market, exceeded 1.28 million units last month, rising 10.5 percent from October, the China Daily reported, citing the car association. Sales will continue to gain in December, Rao Da, secretary general of the association said, according to the newspaper.
Shanghai Retreats
May-delivery rubber in Shanghai closed down 3.1 percent at 32,200 yuan ($4,835) a ton. The price retreated from a record 38,920 yuan on Nov. 11 as China has taken steps to curb speculation in commodity prices after data showed the nation’s inflation accelerated to a two-year high.
China may raise interest rates this weekend, the China Securities Journal reported yesterday.
Gains in Tokyo futures were limited as oil retreated from a 26-month high, weakening the appeal of natural rubber as an alternative to synthetic products used in tires, Tasaka said.
Oil extended a decline for a second day as concern Europe’s debt crisis is spreading drove speculation fuel demand will drop and an industry report showed U.S. gasoline supplies surged the most since January. The January-delivery contract lost 0.9 percent to $87.86 a barrel in electronic trading on the New York Mercantile Exchange at 4:35 p.m. Tokyo time.
Source: Bloomberg