Oct. 6 (Bloomberg) -- Rubber advanced for a third day as better-than-expected U.S. economic data buoyed the outlook for demand, and Malaysia supported Thailand’s move to set a minimum price for the commodity used in tires.
March-delivery rubber climbed as much as 1.4 percent to 308.7 yen per kilogram ($4,020 a metric ton) before settling at 308.2 yen on the Tokyo Commodity Exchange.
U.S. companies added 91,000 workers after an 89,000 gain in August, ADP Employer Services said yesterday. The median forecast in a Bloomberg survey called for the addition of 75,000. The Institute for Supply Management’s non-manufacturing index fell to 53 from 53.3 in August, still higher than the median forecast of 75 economists surveyed by Bloomberg. Stocks rallied.
“Better-than-expected U.S. jobs data triggered gains in equities and rubber,” Gu Jiong, an analyst at Yutaka Shoji Co. Ltd., said by phone from Tokyo. So-called resistance, or clusters of sell orders, is at 310 yen, he said.
The U.S. is the fourth-largest consumer of natural rubber after China, the European Union and India, according to the Singapore-based International Rubber Study Group.
Rubber also rebounded from last quarter’s 15 percent loss as Thailand, the largest producer and exporter, set a minimum price for the commodity at 120 baht ($3.86) a kilogram yesterday.
Malaysia, Indonesia and Vietnam agree on the need for a benchmark price as fellow members of the International Tripartite Rubber Council, Bernard Dompok, the Malaysian minister for plantation industries and commodities, told reporters in Kuala Lumpur today.
Thailand is also considering cutting down aging trees to counter the price slump. The measures will help to put a floor under prices, with support at 300 yen, Gu at Yutaka Shoji said.
The Thai cash price increased to 127.25 baht ($4.09) a kilogram today from 126.25 baht yesterday, the Rubber Research Institute of Thailand said on its website.
Heavy rain since July 25 has caused flooding in 59 of the country’s 77 provinces, and 28 of them remain submerged, the Department of Disaster Prevention and Mitigation said today. Excessive rains disrupt tapping, leading to lower latex output.
Toyo Tire & Rubber Co., Japan’s fourth-biggest tire maker, expects profit to rise at least 30 percent next year on production expansion in China and the U.S. as it rebounds from the effects of Japan’s March 11 disaster, President Kenji Nakakura said in an interview.
The company, which supplies Toyota Motor Corp. and Volkswagen’s Audi AG, forecasts profit will fall 37 percent to 7.7 billion yen this year after Japan’s record earthquake disrupted auto-parts supply chains and the yen hovers at a postwar high against the dollar.
--Editors: Jarrett Banks, Thomas Kutty Abraham
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