Rubber Gains to Four-Month High as Japan Car Sales Improve Demand Outlook

Rubber gained for a second day, climbing to the highest level since April 30, as expanding car sales in Japan raised speculation that demand for the commodity used to make tires may increase.

Futures climbed as much as 1.7 percent, heading for a second weekly increase, after the Nikkei newspaper reported that Japan’s new car sales from Aug. 1 to Aug. 23 surged by 73 percent from the same period last year to more than 149,000.

Sales increased as consumers sought to benefit from a government subsidy program for fuel-efficient cars, which is scheduled to finish at the end of September, said Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co. Demand for rubber and other raw materials used in cars may be sustained at least until the program expires, he said.

“Consumers are advancing car purchases to take advantage of the subsidy program, which appears to have had a positive impact on raw-material demand,” Saito said today by phone.

The February-delivery contract rose to as high as 298.9 yen per kilogram ($3,538 a metric ton) before trading at 298.8 yen on the Tokyo Commodity Exchange at 1:35 p.m.

Gains in futures were limited as Asian stocks declined, curbing investor appetite for riskier assets, Saito said. Equities and crude oil dropped amid speculation that the U.S. government will cut its estimate for second-quarter growth.

U.S. Outlook

A U.S. report today will show gross domestic product grew 1.4 percent in the second quarter, compared with the 2.4 percent the government estimated last month, according to the median forecast in a Bloomberg News survey of economists.

Bernanke will discuss the outlook for the economy and possible policy responses tomorrow at the central bank’s annual symposium in Jackson Hole, Wyoming.

Cash rubber prices in Thailand, the largest producer, climbed 0.8 percent to 105.6 baht ($3.36) per kilogram, the Rubber Research Institute of Thailand said yesterday. The gain was driven by demand from rubber processors and limited supply availability, it said.

Heavy rainfall is likely across Thailand until the end of August, according to the Thai Meteorological Department. Rain disrupts tapping rubber trees, leading to output declines.

January-delivery rubber on the Shanghai Futures Exchange dropped 0.3 percent to 25,435 yuan ($3,741) a ton at the 11:30 a.m. local-time trading break.

(bloomberg.com)