Rubber Gains, Paring Weekly Loss, as U.S. May Have Added Jobs

By Aya Takada

June 4 (Bloomberg) -- Rubber advanced for a second day, paring a weekly decline, on speculation data will show today that U.S. employers added jobs in May for a fifth consecutive month, adding to evidence for an economic recovery.

Futures increased as much as 0.3 percent, erasing earlier losses. The price fell 3.8 percent this week, the biggest drop since the week ended May 7, on increased output from Thailand and concern that Chinese demand may weaken.

The U.S. economy added 536,000 jobs in May, the most in a month since 1983, the Labor Department will say today in its nonfarm payrolls report, according to a Bloomberg News survey of economists. Expectations for an improvement in U.S. employment boosted the dollar against the Japanese currency, raising the appeal of yen-based contracts, said Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo.

“The jobs report will probably strengthen the view that the U.S. economy is recovering,” supporting the dollar against the yen, Sugata said by phone today.

Rubber for November delivery, the most-active contract, added 0.2 percent to settle at 273.9 yen per kilogram ($2,954 a metric ton) on the Tokyo Commodity Exchange.

Earlier, the price dropped to 265.7 yen, the lowest level since May 24. Thai farmers have increased tapping after the low- production season ended, expanding global supply, Sugata said.

Cash prices of natural rubber in Thailand, the top exporter, may decline as production increases this month, the Thai Rubber Association said.

Output Rebound

Production may exceed 200,000 tons a month in June and July, as much as 30 percent more than the low-output period in April and May, the group’s President Luckchai Kittipol said this week. Output this year may be 3.2 million tons, matching 2009, he said.

Rubber futures were also capped by concern that demand in China, the largest consumer, will decline, Sugata said. China’s passenger-car sales growth slowed last month as falling stock prices eroded wealth.

China’s sales of cars, sport-utility vehicles and multipurpose vehicles rose 25 percent in May from a year earlier, compared with growth of 34 percent in April, the China Automotive Technology & Research Center said June 1.

September-delivery rubber on the Shanghai Futures Exchange lost 1.3 percent to 21,645 yuan ($3,170) a ton.

(bloomberg.com)