Bloomberg News

Rubber Gains to Three-Week High as U.S. Data Lift Demand Outlook

May 02, 2012

Rubber advanced to the highest settlement in three weeks after data showed manufacturing in the U.S. grew and auto sales topped analysts’ forecasts, boosting the demand outlook for the commodity used in tires.

The October-delivery contract gained 0.6 percent to end at 315.8 yen a kilogram ($3,921 a metric ton), the highest close since April 10. The most-active price climbed for a fifth day today, the best run since the period to Jan. 20.

Asian stocks extended a global rally after the Institute for Supply Management’s factory index climbed to 54.8 last month, exceeding the most optimistic forecast in a Bloomberg survey, the group’s report showed yesterday. The U.S. data followed a report yesterday that showed manufacturing in China, the world’s largest rubber consumer, expanded at the fastest pace in a year.

“Better-than-expected figures from the U.S. improved market sentiment, spurring investors to buy back futures,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone.

Chrysler Group LLC led the five largest automakers by U.S. sales in exceeding analysts’ estimates for April, according to researcher Autodata Corp. Total light-vehicle sales gained 2.3 percent to 1.18 million, according to Autodata. The seasonally adjusted annual rate was 14.4 million, topping the average 14.3 million estimate of 15 analysts surveyed by Bloomberg.

Futures were also bought as the yen retreated from a two- month high against the dollar, boosting the appeal of contracts denominated in the Japanese currency, Saito said. The Japanese currency weakened as much as 0.7 percent against the greenback.

Thai rubber on a free-on-board basis climbed 0.8 percent to 120.20 baht ($3.90) a kilogram today, according to the Rubber Research Institute of Thailand. Prices were boosted as rain in the south, the main growing area, disrupted tapping, it said.

September-delivery rubber on the Shanghai Futures Exchange gained 0.3 percent to close at 27,305 yuan ($4,331) a ton.

To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

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


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