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Rubber climbed to the highest level in almost a month as Thai cash prices hit a record on tight supply and as a rally in metals raised speculation the economic recovery will boost demand for industrial commodities.
May-delivery rubber on the Tokyo Commodity Exchange gained as much as 1.4 percent to 382.5 yen per kilogram ($4,558 a metric ton) before settling at 380.3 yen. The price climbed to the highest level since Nov. 11, when the most-active contract reached a 30-year high of 383 yen.
Copper climbed to a record in London on speculation the Federal Reserve may extend asset purchases to support the economy, driving the dollar lower and boosting the appeal of commodities as alternative assets. The cash rubber price in Thailand, the biggest producer and exporter, stayed at a record today, according to the Rubber Research Institute of Thailand.
“Rubber drew support from the strength of industrial commodities,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone. “Rising Thai prices also raised speculation that supply may tighten further next year as the low-production season may start in late January.”
The cash rubber price stood at 137.05 baht ($4.56) per kilogram, matching the record reached yesterday, the Rubber Research Institute of Thailand said on its website. Supply is tight as output in Thailand and other Asian producers has been reduced by heavy rain and flooding, Saito 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.
India Car Sales
India sold 161,497 cars in November, rising 20.8 percent from a year earlier, according to data released yesterday by the Society of Indian Automobile Manufacturers.
May-delivery rubber in Shanghai gained as much as 4 percent to 33,480 yuan ($5,029) a ton before closing at 33,100 yuan. The price has increased 35 percent this year and reached a record 38,920 yuan on Nov. 11.
China has taken steps to curb speculation in commodity prices after data showed the nation’s inflation accelerated to a two-year high. China’s three commodities exchanges in Shanghai, Dalian and Zhengzhou are considering increasing contract sizes to curb speculation, the Oriental Morning Post reported today, citing unidentified managers at futures brokerages.
Speculation grew that the Chinese central bank will increase rates this weekend as China’s statistics bureau brought forward the release of November economic data on inflation, retail sales, industrial output and fixed-asset investments by two days to Dec. 11, Saito at Fujitomi said.
China’s central bank last month ordered banks to set aside larger reserves for the second time in two weeks after raising interest rates in October for the first time since 2007.
The ruling Communist Party announced on Dec. 3 that China will shift to a “prudent” monetary policy next year from a “moderately loose” stance as the government seeks to combat accelerating inflation.
Source: Bloomberg