Rubber climbed to a record after crude oil climbed to the highest level in more than two years, boosting the cost of making rival synthetic products, and heavy rains curbed supplies from Thailand, the largest shipper.
The June-delivery contract, which listed on the Tokyo Commodity Exchange on Dec. 22, surged to as high as 419 yen per kilogram ($5,054 a metric ton) during the so-called night session. Trading in this session is settled on Monday.
“Higher oil prices and tight supply from Thailand have pushed rubber prices higher,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo.
New York crude oil jumped 1.1 percent yesterday after the Thomson Reuters/University of Michigan final index of consumer sentiment for December climbed to 74.5 from 71.6 in November. Americans increased spending in November for a fifth straight month and companies stepped up orders for equipment, signaling that the economic recovery is accelerating.
Crude oil for February delivery rose $1.03 to close at $91.51 a barrel in New York, the highest settlement since Oct. 3, 2008. The market is closed today for the Christmas holiday.
Rubber gained 4.5 percent this week, a fourth weekly climb, and is poised to rise in December for a sixth month. That would be the longest winning streak since 1979.
Prices may stay at higher levels early next year as estates in Thailand, the world’s biggest producer, and Indonesia enter their low-production season, known as wintering, Kikukawa said.
Record Cash Price
The cash price in Thailand climbed 0.3 percent to a record 149.05 baht per kilogram, tracking higher oil prices, according to the Rubber Research Institute of Thailand. Supplies are inadequate to meet demand, it said today.
Prices are likely to stay “high” as demand increases amid tight global supplies and rising oil prices, Apichart Jongskul, secretary-general of the Office of Agricultural Economics said today, without giving a forecast.
Production of natural rubber in Thailand may increase 3.9 percent to 3.23 million tons next year as tapping areas increase, Apichart said at a Bangkok conference.
May-delivery rubber in Shanghai climbed as much as 1.4 percent to 37,700 yuan ($5,673) a ton before closing at 37,300 yuan. The contract climbed to a record 38,920 yuan Nov. 11.
To contact the editor responsible for this story: Richard Dobson at Rdobson4@bloomberg.net