Truck Sales in China Augur Well for Rubber, Orient Futures SaysBloomberg News
Truck sales in China, which rose 7.7 percent in March from a year earlier, bode well for consumption of natural rubber, Orient Futures Co. analyst Yan Xinbin said.
“We think the truck sales are showing some positive signs,” Yan said by phone from Beijing after the release of data yesterday from the China Association of Automobile Manufacturers. Rubber, which has dropped 8.5 percent this year on the Tokyo Commodity Exchange, would receive a boost if April truck sales confirm sustained strength in demand, said Yan, who was ranked as the best rubber analyst in China by the Futures Daily and the Securities Times newspapers last year.
China’s truck sales rose to 320,300 units in March, according to a statement by the China Association of Automobile Manufacturers yesterday. Sales in the first three months were 741,573 units, about 5.3 percent higher from the same period a year ago, according to Bloomberg Data.
Trucks account for about half of China’s natural rubber consumption, according to estimates by Sri Trang Agro-Industry Pcl, Thailand’s largest publicly-traded rubber exporter.
Rubber fell into a bear market this month on signs that production will outpace demand. The global surplus may widen this year as consumption expands less than expected because of Europe’s debt crisis and a lack of demand in China, the largest consumer, according to RCMA Commodities Asia Group.
Rubber for September delivery in Tokyo, the global benchmark, fell 0.1 percent to 277.5 yen a kilogram ($2,787 a metric ton) at 10:37 a.m. local time.
China’s enforcement of an environmentally more strict Euro IV standard for trucks starting July 1 will also boost sales for the old-model trucks in the months before July, Yan said.
— With assistance by Feiwen Rong