Rubber Set for Best Weekly Gain Since June on Improved Auto Demand Outlook

Rubber advanced for a second day, heading for the biggest weekly rise since June, amid speculation that demand for the commodity used in tires may grow after automakers raised their earnings outlook.

Futures in Tokyo climbed as much as 0.7 percent to 282.6 yen a kilogram ($3,282 a metric ton) after reaching a five-week high of 287 yen yesterday. The price is set for its best performance since the week ended June 25.

Toyota Motor Corp., the world’s largest carmaker, increased its full-year profit forecast this week on recovering U.S. sales and gains in Asia. The report came after Honda Motor Co., Japan’s second-largest automaker, raised its earnings outlook on improving Asian sales.

“Good numbers from carmakers eased concern that a slowdown in the U.S. economy may curb demand,” Kazuhiko Saito, analyst at Tokyo-based broker Fujitomi Co., said today by phone. “Demand may be sustained, led by growth in Asian car sales.”

January-delivery rubber traded at 281.2 yen at 2:30 p.m. on the Tokyo Commodity Exchange.

Toyota may post net income of 340 billion yen in the year ending in March, compared with an earlier estimate of 310 billion yen, it said on Aug. 4. The automaker raised its sales outlook for all regions except Europe amid a rebound in demand.

Honda expects net income of 455 billion yen in the year ending March, compared with an earlier estimate of 340 billion yen, the Tokyo-based company said July 30.

Gains in rubber futures were limited as Asian equities fluctuated and the dollar traded near the weakest in eight months against the yen ahead of a report today expected to show that the U.S. lost jobs for a second month.

U.S. non-farm payrolls probably fell by 65,000 in July, according to the median estimate of 84 economists surveyed by Bloomberg News. More Americans than projected filed applications for unemployment insurance last week, indicating firings remain elevated as the recovery moderated.

January-delivery rubber on the Shanghai Futures Exchange lost 0.8 percent to 24,625 yuan ($3,637) a ton.

(bloomberg.com)