Rubber in Tokyo and Shanghai pared gains as the dollar rebounded, after climbing earlier amid supply disruptions and on speculation that the U.S. Federal Reserve will ease monetary policy.
The most-active contract on the Tokyo Commodity Exchange added as much as 2.2 percent to 342.5 yen per kilogram ($4,207 a metric ton) before settling at 338.6 yen. Futures reached 343 yen on Oct. 15, the highest level since July 2008.
The dollar strengthened for a third day against the euro as a decline in Asian stocks boosted demand for safer assets and traders judged the greenback’s 6 percent slide in the past month was overdone. The Dollar Index, used by IntercontinentalExchange Inc. to track the greenback against the currencies of six major U.S. trading partners, advanced 0.5 percent to 77.352.
“The dollar’s climb spurred sales of commodities, limiting gains on Tocom,” Chaiwat Muenmee, analyst at Bangkok-based commodity broker DS Futures Co., said by phone today. “Fundamentally, rubber prices can rise further as output has been damaged from heavy rains and floods.”
Stocks rallied earlier after data showed an unexpected 0.2 percent decrease in U.S. output at factories, mines and utilities last month, adding to signs the Fed will need to purchase more securities to bolster the economic recovery after Chairman Ben S. Bernanke signaled last week more quantitative easing is likely.
“Investor risk appetite increased as the U.S. economic data strengthened speculation that the Fed will decide to take additional easing steps at their meeting next month,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone.
Shanghai Record
March-delivery rubber on the Shanghai Futures Exchange climbed 4.5 percent to a record 33,000 yuan ($4,966) a ton before closing at 31,720 yuan.
In the cash market, RSS-3 grade rubber for shipment in November gained 0.3 percent to 120.05 baht ($4.02) a kilogram, boosted by sustained demand from China to replenish stockpiles, while supply remains low amid continued heavy rains, according to the Rubber Research Institute of Thailand.
A severe drought in Yunnan at the beginning of this year and recent torrential rain in Hainan, the top two producing areas in China, will reduce domestic rubber output, according to Guo Cheng, an analyst at Yongan Futures Co.
Natural-rubber imports by China, the world’s largest user, jumped 19 percent from a month ago to 190,000 tons in September as the nation’s passenger-car sales to dealerships quickened from August on additional incentives.
Ghana plans to increase rubber output 83 percent by 2017 to meet rising demand in China and India, a senior official at the West African nation’s Ministry of Food and Agriculture said.
The state-owned Agricultural Development Bank of Ghana will support farmers with 14 million euros ($19.7 million) from next year to start new rubber plantations that will add 15,000 tons to output, helping it reach 33,000 tons by 2017, Joseph Baidoo- Williams, head of the ministry’s tree crops development unit, said in an Oct. 14 interview. The ADB is getting money from the French government to finance the loans, he said.
(bloomberg.com)
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