Aug. 24 (Bloomberg) — Rubber advanced by as much as 5.2 percent as a rally in global stocks raised optimism an economic recovery will boost demand for the commodity used in car tires.

Futures in Tokyo climbed to the highest since Aug. 17 after dropping 6.8 percent last week, the worst loss in 14 weeks. Asian stocks rose, led by commodities producers, after sales of existing homes in the U.S. surged the most on record.

“Investors increased risk appetite and bought the futures after positive economic data sent global stocks soaring,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd., said today by phone.

January-delivery rubber gained by as much as 10 yen to 204 yen a kilogram ($2,156 a metric ton) before trading at 201.7 yen on the Tokyo Commodity Exchange at 11:07 a.m. local time. The bourse suspended trading for five minutes after the 10-yen increase in prices triggered a circuit breaker system.

The Standard & Poor’s 500 Index climbed 1.9 percent on Aug. 21 to the highest close since Oct. 6. Purchases of existing U.S. homes jumped 7.2 percent in July, the most since the tallies began in 1999, the National Association of Realtors said. Federal Reserve Chairman Ben S. Bernanke said the global economy is “beginning to emerge” from recession.

Rubber futures also advanced as the Japanese currency weakened, raising the appeal of yen-denominated contracts for the commodity traded globally in dollars.

The yen declined on growing optimism the global economy is recovering from recession, easing demand for the currency as a refuge. The euro advanced before a report forecast to show European industrial orders declined at a slower pace in June.

The yen declined to 94.65 per dollar at 10:40 a.m. in Tokyo from 94.38 in New York on Aug. 21, when the Japanese currency reached the highest since July 22.

January-delivery rubber on the Shanghai Futures Exchange added 4 percent to 18,785 yuan ($2,750) a ton at 10:15 a.m. local time.

Rubber inventories increased 7,382 tons to 74,940 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said Aug. 21. The volume was the highest level since March 2008.

Source: Bloomberg

TOKYO, Aug 21 (Reuters) – Tokyo rubber futures fell over 1 percent to dip below 195 yen on Friday as selling gathered pace after the industrial commodity topped but failed to stay above the key 200-yen level this week.
* Investor sentiment was undermined by a rise in the yen and after oil and many other commodity prices tracked a fall in regional equity markets. A higher yen deflates yen-based commodity futures prices.
* The key Tokyo Commodity Exchange rubber contract for January delivery <0#JRU:> settled at 194.0 yen per kg, down 1.3 percent from the previous day.
* Earlier this week, the contract rose as high as 208.9 yen.
* The January contract fell 7 percent on the week, marking the biggest weekly fall since mid-May and reversing a rally last week to reach 214.0 yen on Aug. 14, the highest for any benchmark since October.
* “Today’s retreat was due to a stronger yen and a drop in other markets,” said a manager at a Japanese trading firm. “Dominant players now are trend followers… They’re looking at stock markets as well as oil and the yen as a clue for direction,” he said.
* U.S. crude oil reversed earlier gains to fall below $73 per barrel on Friday as optimism over the pace of demand recovery in top energy consumer, the United States, faded on the back of mixed economic data. [O/R] [ID:nLL222515]
* The U.S. government said on Monday it would suspend its popular “Cash for Clunkers” auto rebates as the programme’s $3 billion budget runs dry, a month after it was launched. [ID:nN209152]
* Rubber prices on the physical market have remained relatively firm, underpinned by consistent buying by tyre makers. Also, supplies of raw material remain tight due to rains disturbing tapping in Thailand, the world’s biggest producer, traders said.
* On Thursday, tyre makers bought Thailand’s RSS3 grade at $2.02 per kg and Indonesia’s STR20 grade at $0.82 per pound, the manager said.
* In currency markets, the yen surged to a one-month high against the dollar on Friday, as traders remained worried about the potential for further weakness in Chinese shares and shied away from risky investments. [USD/]
* Japan’s Nikkei stock average <.N225> fell 1.4 percent. Market players said Japanese stocks extended losses in the afternoon due to a stronger yen, which curbs exporters’ profits when repatriated, and weakness in the Hang Seng Index <.HSI> as investors nervously watch moves in Chinese stocks for cues. [.T]

Source: Reuters

Aug. 21 (Bloomberg) — Rubber is headed for the biggest weekly loss in 14 weeks as declining equity markets raised concern that the global economic recovery will be slower than expected, weakening demand for the commodity used in car tires.

Futures in Tokyo lost as much as 2 percent, heading for their worst week since the five days ended May 15. Asian stocks declined, led by shipping lines and automakers, as freight rates dropped and the U.S. announced the end of the “cash-for- clunkers” vehicle trade-in program.

“Recovery in demand may falter as governments cannot continue incentives to boost car sales for long,” Takaki Shigemoto, analyst at Tokyo-based commodity broker Okachi & Co., said today by phone.

January-delivery rubber, the most-active contract, lost as much as 4 yen to 192.6 yen a kilogram ($2,051 a metric ton) on the Tokyo Commodity Exchange before trading at 195.6 yen at 11:46 a.m. local time. The contract has lost about 6 percent this week.

The “cash for clunkers” program offers buyers discounts of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. U.S. Transportation Secretary Ray LaHood said the program will close on Aug. 24 after having recorded transactions worth $1.9 billion in rebates.

Rubber futures gained about 44 percent this year as car sales increased on government subsidies in China, the U.S., Japan and Europe, raising speculation demand for the raw material will expand.

China Sales

China’s passenger-vehicles sales rose to 832,596 in July, up 70.5 percent from July last year, the China Association of Automobile Manufacturers said Aug. 7. The gain was the biggest since January 2006.

Car sales in China expanded more than 45 percent for the past three months after the government cut retail taxes and handed out subsidies to reverse a demand slump. General Motors Co., the largest overseas automaker in China, and Nissan Motor Co. both intend to add capacity in the country, which is set to surpass the U.S. as the world’s largest auto market this year.

January-delivery rubber on the Shanghai Futures Exchange lost 0.3 percent to 18,125 yuan ($2,653) a ton at 10:21 a.m. local time.

Source: Bloomberg

[Dow Jones] Asian physical prices slightly higher on increased buying interest among global tire makers and Indian buyers, and on higher futures. Yesterday, late evening, there were several sales of Indonesian SIR20 rubber at prices around $1.76/kg for September-October shipment, says executive at rubber trading company. Rains in Thailand also supporting prices, traders say.

Source: Dow Jones

[Dow Jones] Physical prices of Thai USS3 rubber tad up at THB62.89-THB63.29/kg vs THB62.69-THB63.03/kg yesterday. “Rainfall is hampering the supply of rubber raw material and the market arrivals remain thin in many regions,” says Thailand-based trader. Combined daily sales in three central markets of Thailand estimated at 57 tons vs 38 tons yesterday but still far below requirements, says Hat Yai-based trading executive; sales comprise 14 tons in Hat Yai, 3 tons in Surat Thani, 40 tons in Chandee.

Source: Dow Jones