BLBG: Rubber in Tokyo Climbs to Highest Level Since July 2008 on Supply Concerns
Rubber futures in Tokyo advanced to a 27-month high on speculation that China, the world’s largest buyer, will increase purchases to replenish stockpiles amid concerns over declining supplies from floods and heavy rains. Shanghai rubber reached a record.
The April-delivery contract, which was listed today on the Tokyo Commodity Exchange, climbed to 343.3 yen per kilogram ($4,252 a metric ton), the highest level since July 14, 2008, before trading at 339.3 yen at 12:05 p.m. Rubber futures in Shanghai surged to a record 33,320 yuan ($5,002) a ton before trading at 33,165 yuan.
“Stockpiles remain at a low level, prompting buyers to step up purchases,” Chaiwat Muenmee, analyst at commodity broker D.S. Futures, said by phone from Bangkok. “Floods in Thailand and China also raised concerns that production may be damaged, reducing limited supplies.”
Stockpiles held at Japanese warehouses fell 0.7 percent to 7,355 tons on Oct. 10, according to data today from the Rubber Trade Association of Japan.
Natural rubber inventories increased by 3,880 tons to 41,681 tons, the highest level in six months, the Shanghai Futures Exchange said on Oct. 22, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin. That was 73 percent lower than this year’s high of 151,832 tons in January.
Torrential rains this month in Hainan after a severe drought in Yunnan at the beginning of this year, the top two producing areas in China, will reduce domestic rubber output, according to Guo Cheng, an analyst at Yongan Futures Co.
Natural rubber imports by China jumped 19 percent from a month earlier to 190,000 tons in September as the country’s passenger-car sales to dealerships quickened from August on additional incentives for buyers.
Wholesale deliveries of passenger cars rose 19.3 percent to 1.21 million, accelerating from 18.7 percent in August, the China Association of Automobile Manufacturers said Oct. 12.
To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
