Rubber Increases as Yen Weakens, Thai Shippers Raise Foreign Buyer Prices

Rubber gained as a weaker Japanese currency raised the appeal of yen-based contracts and after shippers in Thailand, the largest producer, raised cash prices for overseas buyers on stronger demand.

The March-delivery contract gained as much as 0.7 percent to 317.8 yen per kilogram ($3,794 a metric ton) before settling at 317.6 yen on the Tokyo Commodity Exchange. The price reached 318.2 yen yesterday, the highest level for a most-active contract since April 26.

Japan’s currency fell against the dollar after the Bank of Japan cut its key interest rate and said it would step up asset purchases to spur the economy. The yen slid against 14 of its 16 major counterparts after the BOJ said it would create a 5 trillion yen fund to buy government bonds and other assets.

“The weakening of the yen and bright prospects for car sales support the gains of the rubber market,” Varut Rungkhum, an analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok.

The yen declined to 83.64 per dollar at 2:37 p.m. in Singapore, from 83.36 in New York yesterday, after strengthening to 83.16 on Oct. 1, the highest since Sept. 15.

Thai exporters have raised offers for so-called RSS-3 grade rubber for November shipment to about $3.65 a kilogram, from $3.60 at the end of last week, said Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd.

“Cash prices gained on strong demand from tire makers, buoying the futures market,” Sugata said by phone today. “A weaker yen gave more support.”

Auto Sales

U.S. auto sales in September rose to a seasonally adjusted annual rate of 11.8 million, compared with 9.4 million a year earlier, data from researcher Autodata Corp. showed on Oct. 1.

September’s stronger sales, bolstered by Ford Motor Co.’s 41 percent sales gain, are a sign that the car market may have bottomed out and that a slow, stable recovery is under way, said Jesse Toprak, vice president of industry trends for TrueCar.com.

The benchmark Thai rubber price gained 0.2 percent to 110.65 baht ($3.67) a kilogram today, according to the Rubber Research Institute of Thailand. A lack of supply continued to drive prices higher, the institute said.

The Shanghai rubber market is closed as China marks National Day holidays from Oct. 1 to Oct. 7.

Natural-rubber inventories monitored by the bourse expanded 4,680 tons to 31,580 tons, based on a survey of 10 warehouses, the exchange said Sept. 30.

(bloomberg.com)