Rubber Reaches 1-Week High as Oil Rally Boosts Appeal, Yen Drops
Rubber climbed for a third day to the highest level in a week as crude oil gains boosted the appeal of the commodity as an alternative to synthetic products.
The contract for delivery in October gained as much as 1.7 percent to 294.4 yen a kilogram ($2,868 a metric ton), the highest level since May 13. The most-active contract traded at 290.9 yen on the Tokyo Commodity Exchange at 10:32 a.m., paring this year’s loss to 3.8 percent.
Oil in New York traded near the highest level in almost two months before government data that will probably show U.S. stockpiles dropped for a second week, the longest run of declines this year. Japan’s currency weakened to 102.77 per dollar, nearing a four-year low of 103.31 reached May 17 and making yen-denominated futures more attractive to investors.
“Rubber chased a rally in oil amid optimism about the global economic recovery,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said by phone today.
Federal Reserve Bank of Chicago President Charles Evans said the U.S. economy has improved “quite a lot” as the central bank maintains record stimulus and expressed confidence policy makers have tools needed to monitor markets for excesses.
Thai rubber free-on-board rose 1.1 percent to 89.85 baht ($3.01) a kilogram yesterday, according to the Rubber Research Institute of Thailand.
Rubber for delivery in September on the Shanghai Futures Exchange added 0.6 percent to 20,630 yuan ($3,365) a ton. Natural-rubber inventories dropped for a second week by 930 tons to 120,160 tons, the bourse said on May 17 based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin.
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