Rubber in Tokyo climbed to a five- month high as wet weather in Thailand limited supply. Shanghai futures declined.

The most-active contract advanced as much as 1.1 percent to 313.2 yen per kilogram ($3,744 a metric ton), the highest level since April 28, before trading at 311.2 yen on the Tokyo Commodity Exchange at 11:59 a.m. The price is set to rise more than 15 percent this quarter, the best advance since the three months ended Dec. 31.

Wet weather disrupted tapping rubber trees in Thailand, curbing latex production. Shippers in Thailand, the largest producer and exporter, raised offers for so-called RSS-3 grade rubber for November shipment to about $3.60 a kilogram from $3.52 at the end of last week, said Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co.

“A strong physical market gave support to futures in Tokyo,” Tasaka said by phone today. “Considering costs for imports, it’s more economical to buy the contract for physical delivery in Tokyo.”

The March-delivery rubber on the Shanghai Futures Exchange lost 0.5 percent to 26,780 yuan ($4,002) a ton at 11:01 a.m. local time. The market came under pressure as investors were reducing long, or buy, positions before holidays, Tasaka said. China’s financial markets will be closed from Oct. 1 to Oct. 7 for National Day holidays.

The price earlier advanced to 26,955 yuan after data showed yesterday China’s manufacturing quickened in September, increasing speculation demand will expand from the largest user of the commodity used in tires.

China Manufacturing

A China purchasing managers’ index released by HSBC Holdings Plc and Markit Economics rose to 52.9, the highest in five months, from 51.9 in August. The data are seasonally adjusted and readings above 50 indicate an expansion.

Still, gains in Tokyo rubber futures were limited by concern that demand from Japan may weaken as a stronger yen threatens export-oriented manufacturers, Tasaka said.

Japan’s industrial production unexpectedly fell in August, adding to concerns the nation’s export-led recovery is slowing. Factory output decreased 0.3 percent from July, when it declined 0.2 percent, the Trade Ministry said in Tokyo today. The median estimate of 26 economists surveyed by Bloomberg News was for a 1.1 percent gain.

Signs of slowing global demand and the yen’s appreciation are threatening earnings of companies from Murata Manufacturing Co. to Nissan Motor Co. Exports grew at the slowest pace this year in August and the Bank of Japan’s Tankan survey yesterday showed companies forecast pessimists will outnumber optimists by year-end.

The yen traded at 83.55 per dollar at 12:03 a.m. in Tokyo after climbing yesterday to 83.50, the highest level since Sept. 15, when it touched a 15-year peak of 82.88.

Cash price in Thailand fell 0.2 percent to 109.15 baht ($3.58) per kilogram as investors are concerned over strengthening yen and local currency, Rubber Research Institute of Thailand said on its website yesterday.

Limited supply following persistent rainfalls in southern Thailand remains price supportive, it said.

Source: Bloomberg

Rubber advanced for the first time in four days as data showed China’s manufacturing quickened in September, increasing speculation demand for the commodity used in tires will expand.

The most-active contract climbed as much as 0.7 percent to 310.6 yen per kilogram ($3,717 a metric ton) before settling at 309.8 yen on the Tokyo Commodity Exchange. It approached a five- month high of 312.8 yen reached Sept. 27.

Manufacturing accelerated in China for a second straight month, adding to signs the fastest-growing major economy is stabilizing after policy makers curbed lending in an effort to avert asset bubbles. The nation is the biggest rubber user.

“The manufacturing data showed purchasing power remains strong in China,” said Sureerat Kunthongjun, an analyst at Bangkok-based AGROW Enterprise Ltd. “This will help boost demand for rubber.”

A China purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics rose to 52.9, the highest in five months, from 51.9 in August. The data are seasonally adjusted and readings above 50 indicate an expansion.

China’s car-sales growth accelerated for the first time in five months in August, according to the China Association of Automobile Manufacturers. Auto sales in China are set to outpace the U.S. for a second year, spurring carmakers including Toyota Motor Corp. to boost capacity or plan new models.

Still, the market upside is limited as the strengthening Japanese currency cools appetite for yen-denominated contracts, said Varut Rungkhum, an analyst at broker Agro Wealth Ltd.

The yen traded at 83.51 per dollar at 3:51 p.m. in Tokyo after climbing to 83.50, the highest level since Sept. 15, when it touched a 15-year peak of 82.88.

Sentiment Index

Japan’s Tankan index of sentiment rose the least since early 2009 in September and companies forecast that pessimists will outnumber optimists by year-end as a rising yen threatens the nation’s recovery.

The commodity market will be volatile as the Japanese government may act to weaken the currency, said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co.

“The BOJ is likely to do something such as injecting more capital,” said Junichi Makino, a senior economist at Daiwa Institute of Research Ltd. in Tokyo. “That won’t reverse the yen’s uptrend, but should stem excessive gains.”

Cash price in Thailand dropped 0.2 percent to 109.15 baht ($3.58) per kilogram as investors are concerned over strengthening yen and local currency, Rubber Research Institute of Thailand said on its website today.

Limited supply following persistent rainfalls in southern Thailand remains price supportive, it said.

China’s financial markets will be closed from Oct. 1 to Oct. 7 National Day holidays.

“Some investors may close their positions ahead of long Chinese holidays,” Varut said by phone from Bangkok.

The March-delivery contract on the Shanghai Futures Exchange climbed 0.8 percent to 26,910 yuan ($4,025) a ton.

Source: Bloomberg

Rubber dropped from a five-month high as concern grew that European government finances may be worsening, leading to sales of industrial commodities.

The most-active contract dropped 0.4 percent to 307.9 yen per kilogram ($3,656 a metric ton) before settling at 308.5 yen on the Tokyo Commodity Exchange. The contract touched 312.8 yen yesterday, the highest since April 28.

Asian stocks declined today as yield spreads showed perceptions of Ireland and Portugal’s creditworthiness are deteriorating. Oil and base metals also dropped.

“Rubber tracked losses in equities and other industrial commodities,” Takaki Shigemoto, an analyst at JSC Corp. in Tokyo, said by phone. “Risk aversion by investors increased amid renewed concern over the European debt issue.”

The MSCI Asia Pacific Index lost 0.7 percent to 126.21 at 4:56 p.m. Tokyo time. Irish bond yields rose to a record against German bunds yesterday and Portugal’s borrowing costs also increased as the countries struggled to rein in their budget deficits. The spread between Irish and German 10-year government bond yields widened to 434 basis points today.

“Concerns about the global economic outlook haven’t cleared,” said Yasushi Noguchi, a strategist at SMBC Friend Securities Co. in Tokyo. “There are still issues related to Europe’s debt.”

Losses in rubber futures were limited as cash prices increased amid expectations that supplies may remain tight, said JSC’s Shigemoto.

Largest Exporter

Shippers in Thailand, the world’s largest exporter, offered so-called RSS-3 grade rubber for November at $3.59 a kilogram, up from $3.52 at the end of last week, he said.

“Demand from tire makers was strong, while supply was curbed by wet weather,” Shigemoto said.

Natural-rubber supply will be curbed next year as yields from aging trees decline and output growth slows, according to the Association of Natural Rubber Producing Countries. Thailand, Indonesia and Malaysia are the three biggest producers.

“While supply remains tight throughout this year, the possibility of change is remote in 2011,” Jom Jacob, the group’s senior economist, said in a statement earlier this month. The market remains “bullish” as rains disrupt supply from Thailand and Indonesia, the group said.

The March-delivery contract on the Shanghai Futures Exchange climbed 0.4 percent to 26,685 yuan ($3,987) a ton.

Source: Bloomberg

Rubber declined from a five-month high as a drop in global stock markets raised concern that the economic recovery may falter and lower oil prices cut the appeal of the commodity as an alternative to synthetic products.

Futures shed as much as 0.9 percent after reaching 311.5 yen per kilogram ($3,685 a metric ton) on Sept. 22, the highest level since April 28. The price climbed for the second straight week, advancing 4.3 percent, the best performance since May 28.

Asian stocks fell, paring the MSCI Asia Pacific Index’s fourth straight weekly gain, after an increase in U.S. jobless claims damped the outlook for global growth. Oil declined on concern that U.S. fuel demand may decelerate.

“Weak economic data from the U.S. and Europe curbed investor appetite for riskier assets, leading to sales of the raw material,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today by phone.

February-delivery rubber settled at 308.9 yen per kilogram on the Tokyo Commodity Exchange. The September contract, expiring today, climbed 1 percent to settle at 295.8 yen. The market was closed yesterday and Sept. 20 for holidays.

Asian stocks declined after the U.S. Labor Department reported claims unexpectedly increased by 12,000 to 465,000 in the week ended Sept. 18, as the unemployment rate remains near a 26-year high. Growth in Europe’s services and manufacturing industries weakened more than economists forecast in September, adding to signs the recovery is losing steam.

Oil for November delivery lost as much as 0.7 percent to $74.66 a barrel on the New York Mercantile Exchange before trading at $75.02 at 4:33 p.m. in Tokyo.

China, India

“The slowdown in demand growth from China and India pressured the rubber market,” Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co. “But low supply in top producing countries limits the downside,” he added.

Consumption of natural rubber in China, including the premium grade of compound rubber, is expected to increase 4.3 percent in the third quarter, compared with growth of 28 percent in the first quarter, the Association of Natural Rubber Producing Countries said in the monthly report.

Demand growth in India will probably slow to 1 percent in the July-to-September period, from 12.2 percent in the first quarter, the group said.

Losses in rubber futures were limited as wet weather constrained supply in Thailand, the world’s largest producer and exporter, Tasaka said.

Thai Rubber Gains

The cash price in Thailand advanced for a fifth day, climbing 0.2 percent to 109.35 baht ($3.55) per kilogram as persistent rain limits supply, according to the Rubber Research Institute of Thailand. The rain will probably continue across the country in the second half of September, the Thai weather office said on its website.

Drought earlier this year followed by heavy rain has hampered tree-tapping across plantations in Asia, according to Pongsak Kerdvongbundit, managing director of Phuket, Thailand- based Von Bundit Co.

Natural-rubber consumption will outpace supply by 127,000 tons next year, the widest production deficit since 2007, according to Goldman Sachs Group Inc. Stockpiles will drop 12 percent to 67 days of demand in 2011, the lowest level in at least 11 years, the bank estimated in a report this month.

The Shanghai rubber market is closed today for a holiday. The March-delivery contract last traded at 26,805 yuan ($4,004) a ton on Sept. 21.

Source: Bloomberg

Rubber declined from a five-month high as a drop in global stock markets raised concern that the economic recovery may falter and lower oil prices cut the appeal of the commodity as an alternative to synthetic products.

Futures shed as much as 0.9 percent after reaching 311.5 yen per kilogram ($3,685 a metric ton) on Sept. 22, the highest level since April 28. The price climbed for the second straight week, advancing 4.3 percent, the best performance since May 28.

Asian stocks fell, paring the MSCI Asia Pacific Index’s fourth straight weekly gain, after an increase in U.S. jobless claims damped the outlook for global growth. Oil declined on concern that U.S. fuel demand may decelerate.

“Weak economic data from the U.S. and Europe curbed investor appetite for riskier assets, leading to sales of the raw material,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today by phone.

February-delivery rubber settled at 308.9 yen per kilogram on the Tokyo Commodity Exchange. The September contract, expiring today, climbed 1 percent to settle at 295.8 yen. The market was closed yesterday and Sept. 20 for holidays.

Asian stocks declined after the U.S. Labor Department reported claims unexpectedly increased by 12,000 to 465,000 in the week ended Sept. 18, as the unemployment rate remains near a 26-year high. Growth in Europe’s services and manufacturing industries weakened more than economists forecast in September, adding to signs the recovery is losing steam.

Oil for November delivery lost as much as 0.7 percent to $74.66 a barrel on the New York Mercantile Exchange before trading at $75.02 at 4:33 p.m. in Tokyo.

China, India

“The slowdown in demand growth from China and India pressured the rubber market,” Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co. “But low supply in top producing countries limits the downside,” he added.

Consumption of natural rubber in China, including the premium grade of compound rubber, is expected to increase 4.3 percent in the third quarter, compared with growth of 28 percent in the first quarter, the Association of Natural Rubber Producing Countries said in the monthly report.

Demand growth in India will probably slow to 1 percent in the July-to-September period, from 12.2 percent in the first quarter, the group said.

Losses in rubber futures were limited as wet weather constrained supply in Thailand, the world’s largest producer and exporter, Tasaka said.

Thai Rubber Gains

The cash price in Thailand advanced for a fifth day, climbing 0.2 percent to 109.35 baht ($3.55) per kilogram as persistent rain limits supply, according to the Rubber Research Institute of Thailand. The rain will probably continue across the country in the second half of September, the Thai weather office said on its website.

Drought earlier this year followed by heavy rain has hampered tree-tapping across plantations in Asia, according to Pongsak Kerdvongbundit, managing director of Phuket, Thailand- based Von Bundit Co.

Natural-rubber consumption will outpace supply by 127,000 tons next year, the widest production deficit since 2007, according to Goldman Sachs Group Inc. Stockpiles will drop 12 percent to 67 days of demand in 2011, the lowest level in at least 11 years, the bank estimated in a report this month.

The Shanghai rubber market is closed today for a holiday. The March-delivery contract last traded at 26,805 yuan ($4,004) a ton on Sept. 21.

Source: Bloomberg