Dec. 30 (Bloomberg) — Rubber futures doubled this year, marking the largest annual gain in more than three decades, as the global economic recovery boosted demand for the material used in tires. Prices have risen nearly fourfold this decade.

Futures in Tokyo gained in 2009 as government stimulus measures in China, the largest consumer, led a demand revival. The contract, which reached a 15-month high of 278.9 yen per kilogram ($3,030 a metric ton) on Dec. 25, may rise to 300 yen to 320 yen in the January-to-March period, said Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd.

“The outlook for the rubber market in the first quarter is bullish,” Sugata said from Tokyo today. Increased vehicle demand in China and Japan and a strengthening global economy would fuel demand, he said.

Natural rubber for June delivery gained 0.5 percent to settle at 276 yen per kilogram on the Tokyo Commodity Exchange. The bourse will be closed tomorrow and Jan. 1 for the New Year holiday. The futures gained the most this year since 1976, according to Bloomberg data. The price has increased from 72 yen at the end of 1999.

Car sales in China rose 98 percent to 1.04 million units last month, the nation’s automobile manufacturers’ association said Dec. 10. Japan’s vehicle sales may gain 4.1 percent to 4.8 million vehicles next year as the government extends subsidies to boost car demand, an auto industry group said Dec. 24.

Tariff reduction in China will continue to stimulate demand next year, Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co said by phone from Bangkok.

China Tariffs

The so-called temporary tariff rate for ribbed smoked sheet will be set at 20 percent of the import price, or 1,600 yuan ($234) a ton, whichever is lower, China’s Ministry of Finance said Dec. 16. The tariff for technically specified rubber is set at 20 percent of the imported price, or 2,000 yuan per ton, it said.

China’s natural rubber imports rose to 120,000 tons in November from 100,000 tons the previous month, according to government data.

Rubber has also rallied as crude oil futures advanced 77 percent this year in New York, poised for the biggest increase since 1999. Higher crude prices increase the cost of synthetic rubber products made from petroleum.

Crude oil for February delivery traded at $79.16 a barrel in electronic trading on the New York Mercantile Exchange at 2:49 p.m. in Singapore. The futures, which have tripled in the past decade, closed yesterday at the highest settlement since Nov. 18.

Rubber on the Shanghai Futures Exchange rose as much as 3.5 percent to 24,265 yuan ($3,554) a ton, the highest level for a most-active contract since August 2008, before settling at 23,890 yuan. The contract has also more than doubled this year.

Source: Bloomberg

Singapore – Tocom RSS3 rubber futures slightly lower amid mild selling pressure in thin, lackluster trade. “The market lacks momentum and is drifting sideways,” says trading executive in Tokyo; adds prices unlikely to jump significantly until early next month. Overall fundamentals bullish, prices will soon touch Y300/kg, says exporter in Singapore; adds current lull mainly due to lack of trade participation ahead of new year. Benchmark Tocom June contract trading Y0.7 lower at Y274/kg after reaching intraday low of Y273.4.

Source: Moneycontrol.com

Shanghai – Natural rubber futures on SHFE settle mostly lower on profit-taking, despite fund buying in last half-hour trading prompted by gains in metal contracts, says Orient Securities Futures analyst Lin Hui. Adds crude prices will continue to have larger say in natural rubber’s price moves. “Crude oil surged to a 5-week high overnight, so if its bullish trend continues, it will certainly help lift natural rubber prices near- and medium term.” New benchmark 2010 May contract settles down CNY140, or 0.6%, at CNY23,890/ton.

Source: Moneycontrol.com

Singapore – RSS3 rubber on Agricultural Futures Exchange of Thailand settles lower on long liquidation, rolling over of positions. “The market has been active as investors rolled over their positions to the new August contract but under pressure due to profit taking ahead of the new year,” says trader in Thailand; adds fundamentals still strong due to limited supply in physical market. Most traders put immediate resistance at THB96/kg. New benchmark August RSS3 contract settles THB0.15 lower at THB95.95/kg.

Source: Moneycontrol.com

Shanghai – Natural rubber futures on SHFE settle mostly higher on firm crude oil, says Orient Securities Futures analyst He Jing. Adds natural rubber may rise further over next few sessions “if crude oil keeps rising”; improving fundamentals to support natural rubber medium-, long-term. Benchmark 2010 March contract settles up CNY15 at CNY24,030/ton.

Source: Moneycontrol.com