Rubber Advances for a Second Day as Growth Concerns Ease on China, Europe

Rubber climbed for a second day as Asian equities advanced on signs that economic growth may strengthen in China and Europe, easing concern that demand may weaken for the raw material used to make tires.

Futures in Tokyo rallied as much as 1 percent to 297.8 yen a kilo ($3,573 a metric ton). Gains were limited as the yen climbed to a 15-year high against the dollar.

Asian equities gained for a fourth day after China’s Premier Wen Jiabao said the nation is in “good shape,” and after the European Commission said Europe’s economy may grow almost twice as fast as previously forecast this year. The advance in stocks increased investor appetite for raw-material futures, said Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co.

“Rubber chased a rally in stocks and oil as concerns about economic recovery recede,” Tasaka said today by phone.

February-delivery rubber settled at 297.1 yen on the Tokyo Commodity Exchange. The most-active contract has advanced 7.6 percent this year.

“China’s economy is now in good shape, featuring fast growth, gradual structural improvement, rising employment and basic price stability,” Wen said yesterday at the World Economic Forum’s Summer Davos meeting in China’s northern port city of Tianjin.

Gross domestic product in the 16-nation euro region may increase 1.7 percent this year, instead of the 0.9 percent projected at the depth of Europe’s fiscal crisis in May, the Brussels-based commission said in a report yesterday.

“The sense of uncertainty about the future of the global economy is easing,” said Masumi Yamamoto, a market analyst at Tokyo-based Daiwa Securities Capital Markets Co.

March-delivery rubber on the Shanghai Futures Exchange dropped 0.4 percent to close at 25,650 yuan ($3,802) a ton.

Natural-rubber inventories dropped 600 tons to 25,220 tons, the Shanghai Futures Exchange said Sept. 10, based on a survey of 10 warehouses.

Rubber processors continue building up positions before a new levy on Thai rubber exports takes effect on Oct. 1, Chaiwat Muenmee, analyst at Bangkok-based commodity broker DS Futures, said by phone today from Bangkok.

(bloomberg.com)