Rubber Jumps to One-Week High as U.S. Data Boost Growth Outlook
Rubber jumped to a one-week high after U.S. housing data beat estimates, boosting optimism that the largest economy will expand and support raw-material demand.
The May-delivery contract gained as much as 3.1 percent to 279.7 yen a kilogram ($3,597 a metric ton), the highest level since Dec. 14, before settling at 277.9 yen on the Tokyo Commodity Exchange. It has slumped 33 percent this year, heading for the worst performance in three years.
Asian stocks (MXAP) extended a global rally after a U.S. report showed builders broke ground in November on 685,000 houses, the most since April 2010. Equities and commodities also advanced as concerns about Europe eased after Spain sold 5.64 billion euros ($7.38 billion) of bills, more than the maximum target, and after Chinese Premier Wen Jiabao pledged support for exports.
“The good result of Spain’s bill sales and upbeat numbers on U.S. housing improved investor sentiment,” Makiko Tsugata, an analyst at research company Market Risk Advisory in Tokyo, said today by e-mail. “Price movements were exaggerated by thin trading as market participants declined ahead of holidays.”
Rubber also advanced after oil climbed for a third day in New York, boosting the appeal of natural rubber as an alternative to synthetic products made from petroleum. Crude for February delivery rose as much as 1.2 percent in New York, extending yesterday’s 3.4 percent rally on signs of economic recovery and concern shipments from Iran may be curbed.
Prices are supported by concerns that heavy rains in Thailand’s south and Malaysia may disrupt latex tapping and cut supplies, said Chaiwat Muenmee, analyst at Bangkok-based commodity broker DS Futures Co.
The Thai cash price gained 0.7 percent to 105.65 baht ($3.38) per kilogram today, according to the Rubber Research Institute of Thailand.
Global demand is forecast to climb to 27.2 million tons next year, boosted by an expected increase in consumption of natural and synthetic rubber, according to the International Rubber Study Group.
Synthetic demand may rise 5.5 percent next year, while that for natural rubber may grow 4.6 percent, the group said in a statement yesterday. Global natural rubber output may rise 5.1 percent next year, it said, without giving a volume.
May-delivery rubber on the Shanghai Futures Exchange climbed 1.4 percent to close at 25,275 yuan ($3,986) a ton.