Bloomberg News

Rubber Climbs for Second Day on Expectations for Monetary Easing

July 03, 2012

Rubber advanced for a second day on speculation that central banks may ease monetary policy after manufacturing unexpectedly shrank in the U.S.

The December-delivery contract gained as much as 2.8 percent to 253 yen a kilogram ($3,175 a metric ton), the highest level since June 20, before trading at 251.5 yen on the Tokyo Commodity Exchange at 2:40 p.m. That pared this year’s loss to 4.5 percent.

Asian stocks climbed on expectations that central banks from Washington to Frankfurt and Beijing may ease monetary policy to shore up growth. Concern about the U.S. economy grew after the Institute for Supply Management’s manufacturing index for June showed a contraction for the first time in almost three years, even as gauges from Europe to China topped forecasts.

“Futures were bought back as a rally in equities markets boosted the risk appetite of investors,” said Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo. The U.S. data raised speculation for additional policy easing, he said today.

The European Central Bank and the Bank of England will announce interest-rate decisions on July 5. ECB officials will cut the benchmark rate 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 57 economists. A cut in the reserve requirement ratio for major banks is due, the China Securities Journal said.

Rubber for September delivery surged 2.6 percent to 23,885 yuan ($3,759) a ton on the Shanghai Futures Exchange at midday break. Thai rubber on a free-on-board basis was unchanged at 103.55 baht ($3.28) a kilogram today, according to the Rubber Research Institute of Thailand.

Thailand’s Rubber Estate Organization raised the price at which it buys ribbed-smoked sheets from farmers to 94.95 baht a kilogram. That’s higher than the average auctioned price in three southern markets of 91.95 baht, it said.

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

To contact the editor responsible for this story: Jarrett Banks at Jbanks15@bloomberg.net


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