Natural rubber futures advanced for the seventh time in eight days on speculation China, the world’s largest consumer, will increase raw material purchases as the government implements a package to restore economic growth. China’s economy, the world’s third-biggest, may expand 6.6 percent in the second quarter after slowing to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to a survey by Bloomberg News. The country is spending on roads and houses under a 4 trillion yuan ($585 billion) stimulus plan, helping to drive a record $237 billion of new loans in January. “The record lending signals Chinese consumption and manufacturing activity may be recovering,” Jun Nishimuta, an analyst at Kanetsu Asset Management Co. in Tokyo, said today by phone. “Raw material demand from China may start picking up.” Rubber for July delivery, the most-active contract, added 2.4 percent to 143.9 yen a kilogram ($1,579 a metric ton) on the Tokyo Commodity Exchange at the 11 a.m. local time break. In January, Chinese imports of natural rubber dropped 65 percent from a year earlier to 60,000 tons, the Beijing-based customs office said Feb. 11. China is trying to reverse an economic slide that has already cost 20 million jobs, raising the risk of social unrest. The government’s stimulus plan, announced in November, is beginning to gather momentum as projects such as the building of 3.5 billion yuan of public houses in Shaanxi province and Shanghai began in December. Auto Slump Rubber futures lost 0.1 percent this week, heading for the first weekly drop in three weeks. Prices were capped as a slump in the auto industry deepened, raising concern demand will weaken further for the commodity used to make tires. Nissan Motor Co., Japan’s third-largest automaker, said this week it will slash 20,000 jobs and post its first loss in nine years as the global recession cools car demand. In India, sales of passenger cars fell 3.2 percent in January from a year ago, the fourth straight month of decline. Weaker oil was another drag on rubber prices as the cost of making rival synthetic product declined, Nishimuta said. Crude oil in New York fell $1.96, or 5.5 percent, to $33.98 a barrel yesterday, the lowest settlement since Dec. 19. It was the fifth consecutive daily decline. Synthetic rubber is made from naphtha, distilled from petroleum. May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, gained 3.3 percent to 13,865 yuan a ton at 11:27 a.m. local time.

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