Rubber Rebounds as Drop to Two-Year Low Boosts Buying Interest

Rubber jumped by the most in a week as its slump to the lowest level in more than two years attracted buyers amid speculation that China, the biggest consumer, will take measures to boost its economy.

The November-delivery contract advanced as much as 3.7 percent to 240.2 yen a kilogram ($2,998 a metric ton) before settling at 237.3 yen on the Tokyo Commodity Exchange. The most- active contract has plunged 27 percent this quarter, the most since the final three months of 2008. It has lost 9.9 percent in the first half, touching a low of 227.8 yen.

China’s central bank may cut the reserve-requirement ratio for lenders “soon” and use reverse repurchase agreements to alleviate a possible capital shortage in July, China Securities Journal reported, citing unnamed analysts.

“Futures advanced on optimism that China will stimulate the economy,” Sureerat Kunthongjun, an analyst at AGROW Enterprise Ltd., said by phone from Bangkok.

Rubber also climbed as the Japanese currency traded at a two-month low against the dollar, making yen-denominated contracts more attractive to investors, said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo.

September-delivery rubber on the Shanghai Futures Exchange lost 1 percent to close at 22,335 yuan ($3,510) a ton. Natural- rubber inventories gained 846 tons to 17,988 tons, based on a survey of nine warehouses in China, the bourse said on June 21.

Thai rubber on a free-on-board basis dropped 1.7 percent to 103.10 baht ($3.24) a kilogram today as production improved after rains subsided, according to the Rubber Research Institute of Thailand.

The country’s Rubber Estate Organization will cut the price it buys ribbed-smoked sheets from farmers by 2.6 percent to 92.50 baht a kilogram on June 26. That’s higher than the average auctioned price in three southern markets of 90.59 baht, the organization said.

To contact the reporters on this story: Aya Takada at atakada2@bloomberg.net; Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net