Rubber Advances on Speculation China May Boost Purchases, Crude Oil Gains

Rubber advanced, tracking gains in crude oil, on expectations that China, the world’s biggest buyer, will sustain purchases.

January-delivery rubber in Tokyo added 1.2 percent to 283.30 yen a kilogram on the Tokyo Commodity Exchange at 11:46 a.m. local time. The contract lost 0.5 percent last week, the first decline in four weeks.

“A rally on the Shanghai market spilled over to Tokyo,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co. Floods in China may have hurt plantations, spurring speculation the country will increase imports of the commodity used to make tires and gloves, he said.

January-delivery rubber in Shanghai gained as much as 1.9 percent to 25,225 yuan ($3,713) per ton, before trading at 24,910 a ton.

Crude oil increased as much as 0.3 percent to $75.46 a barrel, improving the competitive position of natural rubber against rival synthetic material made from petroleum.

Natural rubber inventories in China expanded for a third week by 1,667 tons to 21,875 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Aug. 13.

Rubber stockpiles in Japan grew to 3,275 tons as of July 31 from a record low of 2,628 tons on July 20, according to Rubber Trade Association of Japan data.

The benchmark Thai rubber price was little changed at 104.50 baht per kilogram yesterday, according to the Rubber Research Institute of Thailand. The price is updated daily in the afternoon.

(bloombreg.com)