Bloomberg News

Rubber Climbs to Pare Quarterly Slump as Growth Concern Eases

September 30, 2011

Sept. 30 (Bloomberg) -- Rubber advanced, paring a quarterly decline, after U.S. initial jobless claims fell more than estimated and German lawmakers backed an enhanced euro-region rescue fund, easing concern that the global recovery may stall.

March-delivery rubber gained as much as 3.9 percent to 313.3 yen a kilogram ($4,087 a metric ton) before settling at 310.8 yen on the Tokyo Commodity Exchange. The most-active contract has dropped 15 percent this quarter, extending the second quarter’s loss of 15.6 percent.

Oil climbed for a second day, boosting the appeal of natural rubber as an alternative to synthetic products, after Germany’s lower house of parliament approved the expansion of the European bailout fund. A drop in U.S. applications for jobless benefits eased concern that high unemployment will damp car sales and tire demand, curbing rubber consumption.

“Investors bought back futures after positive news from the U.S. and Europe,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone. “A recovery in the Shanghai market also spurred buying in Tokyo.”

In Shanghai, January-delivery rubber increased for the first time in three days, recovering from a one-year low reached yesterday. The contract advanced as much as 4.7 percent to 27,880 yuan ($4,366) a ton before closing at 27,775 yuan. The market will be closed next week for the National Day holiday.

Oil gained in New York as investors speculated that U.S. fuel demand will rise after signals that the world’s biggest economy is growing faster than previously estimated.

U.S. Growth

The U.S. economy grew at a 1.3 percent pace in the second quarter, compared with a median forecast of 1.2 percent in a Bloomberg survey. Initial jobless claims last week dropped to the lowest level since April and pending homes sales in August declined less than expected.

“Slightly positive economic data in the U.S. lifted the mood,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. “We got a reprieve for Europe’s debt crisis.”

The price was also supported by falling supplies from Thailand, the largest producer, as persistent rains in the country’s southern region have disrupted latex tapping, the Rubber Research Institute of Thailand said on its website. The cash price of Thai rubber dropped 1.1 percent to 129.60 baht ($4.16) a kilogram today, it said.

Crude rubber stockpiles held at Japanese warehouses rose 7 percent to 10,061 tons on Sept. 20, data from the Rubber Trade Association of Japan showed today. Stockpiles of natural rubber in Shanghai fell 1,950 tons to 31,816 tons, Shanghai Futures Exchange said in a weekly report today.

--With assistance from Supunnabul Suwannakij in Bangkok. Editors: Ovais Subhani, Jarrett Banks

To contact the reporters on this story: Aya Takada at atakada2@bloomberg.net

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net


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