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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