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Rubber Rallies to 10-Month High on U.S. Car Sales, Weakening Yen

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Feb. 4 (Bloomberg) -- Rubber surged to a 10-month high on speculation that demand for the commodity used in tires may increase after car sales in the U.S. rose in January.

The contract for delivery in July rallied 3 percent to 333.3 yen a kilogram ($3,595 a metric ton) on the Tokyo Commodity Exchange, the highest settlement price for the most-active contract since March 28. Futures rose 3.8 percent last week, the eighth advance in nine weeks, and have risen 10 percent this year.

Toyota Motor Corp. and Ford Motor Co. led the four largest automakers by U.S. sales in reporting January gains that topped estimates, as buyers return to showrooms to begin a fourth consecutive year of growth. Toyota’s deliveries of cars and light trucks surged 27 percent and Ford’s climbed 22 percent, while General Motors Co. and Chrysler Group LLC sales each rose 16 percent, the companies said Feb. 1. Industrywide light-vehicle sales increased 14 percent, according to researcher Autodata Corp., matching analysts’ estimates.

“Strong auto data from the U.S. created a bullish mood in the rubber market,” said Kazuhiko Saito, analyst at broker Fujitomi Co. in Tokyo. The yen’s drop beyond 92 per dollar also spurred buying, he said.

The yen touched 92.97 on Feb. 1, the weakest since May 2010, amid optimism that the Bank of Japan will boost monetary stimulus, boosting the appeal of commodities priced in the currency. It gained 0.1 percent to 92.70 per dollar today.

Imports by China, the world’s largest consumer, surged 18 percent last year to 3.37 million tons, the Association of Natural Rubber Producing Countries said in a monthly bulletin on Feb. 1. Imports may rise 0.9 percent this year to 3.4 million tons, it said. Inventories gained 807 tons to 98,814 tons, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Feb. 1.

Rubber for May delivery rose 1.2 percent to close at 26,780 yuan ($4,299) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board gained 2.1 percent to 98.90 baht ($3.32) a kilogram today, according to the country’s Rubber Research Institute.

To contact the reporters on this story: Aya Takada in Tokyo 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

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