Rubber Advances, Paring Monthly Drop, on Outlook for Supply Cut

Rubber rebounded from the lowest level since December, paring the first monthly loss in four, after a producer group representing the three largest exporters said it may extend export restrictions to support prices.

The contract for delivery in August advanced as much as 2.5 percent to 295.3 yen a kilogram ($3,191 a metric ton) before trading at 293.9 yen on the Tokyo Commodity Exchange at 10:20 a.m. Futures have lost 6.9 percent this month, heading for the worst performance since May.

Thailand, Indonesia and Malaysia may extend shipment cuts if prices drop below $3 per kilogram when the program ends in March, Darmansyah Basyaruddin, chief executive officer at the International Rubber Consortium, told reporters at seminar in Jakarta yesterday. The price in Tokyo dropped to 284.8 yen yesterday, the lowest since Dec. 21.

“Caution about supply restrictions prevented further losses in rubber futures,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said by phone today.

Thailand, the largest producer, agreed with Indonesia and Malaysia last year to cut exports by a combined 300,000 tons in the six months through March. The action came after prices slumped to an almost three-year low of 205.6 yen in August.

Futures also gained after data showed today Japan’s industrial production rose for a second month in January, raising speculation demand will grow, Shigemoto said. Output climbed 1 percent from December, when it rose 2.4 percent, according to the trade ministry.

The contract for September delivery on the Shanghai Futures Exchange added 1.1 percent to 24,775 yuan ($3,978) a ton. Thai rubber free-on-board declined 1.1 percent to 88.7 baht ($2.97) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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