Rubber Climbs to Five-Week High as U.S. Auto Sales Top Forecast

Rubber advanced to the highest level in almost five weeks as U.S. factory orders and auto sales topped estimates, raising speculation demand will improve for the commodity used in tires.

December-delivery rubber rose 2.2 percent to end at 256.6 yen a kilogram ($3,216 a metric ton), the highest settlement level for a most-active contract since May 31, on the Tokyo Commodity Exchange. That pared this year’s loss to 2.6 percent.

Asian stocks climbed for a sixth day, with the regional benchmark heading for its longest winning streak this year, after data showed U.S. factory orders rose in May for the first time in three months. General Motors Co., Ford Motor Co. and Chrysler Group LLC reported U.S. auto sales for June that topped analysts’ estimates, helping the industry surpass projections and stay on pace for the best year since 2007.

“The better-than-expected figures underlined the strength of the U.S. auto industry, which is positive for rubber demand,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone.

U.S. auto sales accelerated to a 14.1 million seasonally adjusted annualized rate, according to researcher Autodata Corp. The pace topped the 13.8 million light-vehicle rate that was the average estimate of 15 analysts surveyed by Bloomberg. Auto-industry sales provide a bright spot in the world’s largest economy that has been hindered by persistent unemployment and weakening consumer confidence.

Futures were supported by speculation that the Federal Reserve will take additional stimulus to boost growth, Saito said. The International Monetary Fund yesterday cut its growth forecast for the U.S. economy as Managing Director Christine Lagarde said further monetary policy easing may be needed by the Fed if the situation was to deteriorate.

Rubber for September delivery rose 0.2 percent to 23,915 yuan ($3,768) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board was unchanged at 103.55 baht ($3.29) a kilogram, according to the Rubber Research Institute of Thailand.

Thailand’s Rubber Estate Organization raised the price at which it buys ribbed-smoked sheets from farmers by 1.1 percent to 96.20 baht a kilogram for tomorrow. That’s higher than the average auctioned price in three southern markets of 93.20 baht.

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