BLBG:Rubber Surges Most in Six Months as Europe Seeks Solution to Debt Crisis
Rubber surged by the most in six months on expectation European leaders will act to prevent the region’s sovereign-debt crisis from getting worse, and amid speculation the German economy may avoid recession.
February-delivery rubber jumped as much as 6.9 percent, the biggest gain since March 18, before trading at 319.8 yen a kilogram ($4,208 a metric ton) on the Tokyo Commodity Exchange at 11:14 a.m. local time. The March-delivery contract, listed on the bourse today, climbed to 325 yen after opening at 318.7 yen.
Futures recovered from a one-year low reached yesterday after a euro-region central bank official said the European Central Bank is likely to debate restarting covered-bond purchases and may discuss interest-rate cuts to ease funding strains. Asian stocks extended a global rally while oil advanced for a second day, boosting the appeal of natural rubber.
“Pessimistic views about Europe’s debt crisis receded, spurring investors to buy back futures,” Takaki Shigemoto, an analyst at JSC Corp. in Tokyo, said today by phone.
German Chancellor Angela Merkel has stepped up her defense of the euro and toned down calls to punish Greece for its fiscal sins as the region’s debt crisis spread. Merkel hosts Greek Prime Minister George Papandreou for talks in Berlin today as credit-default swaps show a more than 90 percent chance that Greece won’t meet its debt commitments.
German business confidence fell less than economists forecast in September, suggesting Europe’s largest economy may avoid recession even as the region’s debt crisis worsens.
Futures also increased after the International Rubber Consortium Ltd. said Thailand, Indonesia and Malaysia, which represent about 70 percent of supply, may slow exports.
“The group is closely monitoring the situation and has prepared measures to respond to panic selloffs in the futures market,” Yium Tavarolit, chief secretary of the group said yesterday. The cash price of Thai rubber fell 3.2 percent 136.10 baht ($4.37) a kilogram yesterday, the Rubber Research Institute of Thailand said on its website.
In Shanghai, January-delivery rubber jumped as much as 4.8 percent to 28,785 yuan ($4,501) a ton.
To contact the reporter on this story: Aya Takada at atakada2@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
