Rubber Gains Most in 4 Months on Optimism China to Boost Growth

Rubber advanced by the most in four months on optimism that China will boost economic growth, improving demand for the commodity used for tires.

October-delivery rubber rose as much as 3.7 percent, the biggest gain since Jan. 17, to 279.9 yen a kilogram ($3,531 a metric ton) on the Tokyo Commodity Exchange, before settling at 278.7 yen. The most-active contract tumbled 15 percent in the past two weeks as Europe’s debt crisis escalated.

Asian stocks rose, with the regional index rebounding from its biggest drop in six months, after Premier Wen Jiabao said China will focus more on bolstering growth, indicating policies may be loosened further as inflation moderates.

“China’s focus on boosting growth and Thailand’s price- support policy helped trigger the gains,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.

German and French leaders meet today in Berlin before a European Union summit on May 23 to map out a revised plan after Greece’s possible exit erased almost $4 trillion from global stock markets this month.

Thailand, the biggest exporter, plans to buy more than 10,000 tons on the Tokyo and Shanghai exchanges and will keep buying from farmers until prices reach appropriate levels, Rubber Estate Organization Managing Director Chanachai Plengsiriwat said May 18.

September-delivery rubber on the Shanghai Futures Exchange gained 2.7 percent to close at 24,735 yuan ($3,910) a ton. Thai rubber on a free-on-board basis rose 1.1 percent to 116.05 baht ($3.70) a kilogram today, according to the Rubber Research Institute of Thailand.

The Rubber Estate Organization kept the price at which it will buy ribbed smoked sheets from farmers unchanged at 115.39 baht to 115.48 baht per kilogram, the agency said on its website today.

To contact Bloomberg News staff for this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: Jarrett Banks at jbanks15@bloomberg.net

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