Rubber Futures Advance as U.S. Payroll, Auto Sales Boost Demand Prospect
Rubber climbed for a fourth day to a one-week high as data showed bigger-than-forecast growth in U.S. employment and higher vehicle sales, boosting optimism that demand will grow for the commodity used in tires.
May-delivery rubber on the Tokyo Commodity Exchange added as much as 2.7 percent to 373.3 yen per kilogram ($4,441 a metric ton) before settling at 371.7 yen. The most-active contract reached a 30-year high of 383 yen on Nov. 11.
A report from ADP Employer Services showed businesses added 93,000 workers to payrolls in November, more than the 70,000 expected by economists, based on the median of estimates compiled by Bloomberg. General Motors Co. and Ford Motor Co. reported improved sales last month as demand for pickups and sport-utility vehicles helped the industry match its fastest sales pace of the year.
“Data from the U.S. boosted investor confidence in economic recovery, leading to purchases of industrial commodities including rubber,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone.
May-delivery rubber in Shanghai rose as much as 2.8 percent to 32,045 yuan ($4,808) a ton. The price reached a record 38,920 yuan on Nov. 11.
Industrywide light-vehicle sales ran at a 12.3 million annual pace in November, matching the October rate that was the fastest since the U.S. government’s “cash for clunkers” program in 2009. Annual U.S. sales plunged to 10.4 million last year, the worst year since 1982, after averaging 16.8 million from 2000 to 2007.
The cash rubber price in Thailand increased to 132.05 baht ($4.40) per kilogram today from 131.55 baht yesterday, the Rubber Research Institute of Thailand said. The price climbed to a record 132.75 baht on Nov. 23 as rain and flooding curbed supply from the world’s largest producer and exporter as China- led demand climbed.
Bridgestone Corp., the world’s largest tiremaker, expects to cut its rubber use by 50 percent in the next decade to cope with rising raw material costs, Masayuki Ishii, general manager at the corporate communications division said in an interview.
The company will use 1.77 million tons of natural and synthetic rubber for tire production this year, up 24 percent from 2009. Of the total, 1.23 million tons, or 69 percent, is for output overseas, he said.
Natural-rubber demand in China will be 2.8 million tons this year, while local output may be 680,000 tons, according to Hangzhou Zhongce Rubber Co., the nation’s largest tiremaker. It gave the forecasts at an industry conference in Bangkok today.
Thai Hua Rubber Pcl., Thailand’s third-largest rubber exporter, has signed deals to supply around 1.8 million tons to Chinese tiremakers and rubber products companies.
The company and its affiliates, Thai Mac STR Co. and Hua Tai Rubber Co., will supply latex, standard Thai rubber compound and ribbed smoked sheet compound to eight Chinese companies including Hangzhou Zhongce Rubber Co., China’s largest tiremaker, Luckchai Kittipol, chief executive officer of Thai Hua Rubber, said on the sidelines of a seminar.
Supply from the Association of Natural Rubber Producing Countries, which accounts for about 92 percent of global output, may drop 3.8 percent in the three months to Dec. 31 as rains have disrupted tapping in Thailand, the group said on Nov. 25.
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