Rubber futures in Tokyo surged to a 30-year high and cash prices in Thailand climbed to a record on concern that rain will worsen a supply shortage, and as China’s inflation accelerated, boosting demand for commodities.
April-delivery rubber on the Tokyo Commodity Exchange gained as much as 3.6 percent to 383 yen per kilogram ($4,661 a metric ton), the highest level since February 1980, before settling at 379.1 yen. May-delivery rubber in Shanghai gained as much as 3 percent to a record at 38,920 yuan ($5,874) a ton, before dropping 2.8 percent to close at 36,755 yuan.
China’s inflation accelerated to 4.4 percent in October, the fastest pace in two years, prompting investors to seek commodities as a hedge against accelerating consumer prices. Still, Moody’s raised the country’s debt rating to Aa3 from A1 today, citing the nation’s financial strength and ability to contain losses from a credit boom.
“Rubber looks set to test a record high in the near future as its fundamentals are bullish, and as a record-breaking rally in metals boosted investor interest in other commodities too,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone.
Rubber futures in Tokyo have gained 37 percent this year as producers have had difficulty catching up with growing demand because of rain and flooding that disrupted latex output in Southeast Asian countries.
Tree Damage
“News reports on rubber tree damage and production declines fueled rubber prices to records,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said today by phone from Bangkok.
Recent floods and storms in Thailand are expected to damage 540,814 rai (213,821 acres) of rubber plantation land, government spokesman Watchara Kannikar said Nov. 9. That is equivalent to 4.5 percent of the country’s tappable area of 12 million rai, according to Bloomberg calculations.
The cash price in Thailand climbed to a record as floods across two-thirds of the country damaged rubber trees and lowered output. The contract for ribbed smoked sheet gained 1.5 percent to 132 baht ($4.47) a kilogram today. The rubber-trading center in Songkhla province was closed for three days from Nov. 2 because of floods.
Prices may surge above 150 baht by the end of this year as demand remains robust while supply is limited, according to Supachai Phosu, deputy minister of agriculture and cooperatives.
Car Sales
Demand from tire makers is increasing, led by car sales growth in China and India, Saito at Fujitomi said.
Sales in India of passenger vehicles in October increased 38 percent from a year earlier to a record 231,957 units, the Society of Indian Automobile Manufacturers said yesterday. About 1.4 million units have been sold in the seven months started April 1, compared with 1.53 million for all of last fiscal year, according to the society.
China’s passenger-car sales in October rose at the fastest pace in six months as government incentives for fuel-efficient cars boosted purchases in the world’s largest auto market.
Wholesale deliveries of cars, sport-utility vehicles and multipurpose vehicles increased 27 percent from a year earlier to 1.2 million last month, the China Association of Automobile Manufacturers said in a statement on Nov. 9.
China imported 160,000 tons of natural rubber in October, the country’s customs authority said yesterday. That was 16 percent less than imports of 190,000 tons in September.
(bloomberg.com)
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