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Rubber Futures in Tokyo Advance in July, First Monthly Gain Since March
Rubber futures rose 1.3 percent in July, the first monthly advance since March.
January-delivery rubber on the Tokyo Commodity Exchange dropped as much as 0.7 percent after an unexpected drop in Japan’s industrial production raised concerns that demand may weaken. The contract settled little changed at 272.7 yen a kilogram ($3,158 a metric ton) as an advance in the nearby contract and speculation Chinese buyers may build up declining stockpiles provided support.
Japan’s unemployment unexpectedly rose for a fourth straight month and industrial production fell the most in more than a year, signaling economic expansion is poised to slow.
“Japan’s bearish economic data soured sentiment, pressuring the market lower,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok. “A strong yen is also weighing on the market,” he said.
Japan’s jobless rate climbed to a seven-month high of 5.3 percent in June, a statistics bureau report showed today in Tokyo. Factory output slid 1.5 percent from May, compared with the median forecast in a Bloomberg News survey of economists for a 0.2 percent gain. Consumer prices excluding fresh food declined 1 percent from a year before.
Low Inventories
Low stockpiles in China and Japan provide optimism that buyers will soon replenish inventories, Varut said.
Data from the Tokyo exchange showed last week that natural rubber stockpiles monitored by the bourse dropped 29 percent to 1,341 tons as of July 10. That’s the lowest level since at least 2001, according to exchange spokesman Seiki Ichimura.
Natural-rubber stockpiles in China decreased 2,046 tons to 19,328 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said on July 23.
January-delivery rubber on the Shanghai Futures Exchange gained 1 percent to 23,965 yuan ($3,538) a ton.
The nearby contract in Tokyo advanced on optimism over increasing car demand in China and India, Katsumi Kinoshita, senior manager for institutional department at Orion Koeki Ltd. said by phone from Kobe. August-delivery rubber surged 1.1 percent to settle at 303.8 yen.
Thailand’s supplies are likely to improve as rainfall is expected to subside next week, according to the Rubber Research Institute of Thailand. The Thai price gained 0.5 percent to 103.9 baht ($3.22) a kilogram today.
To contact the reporters on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net
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