Rubber jumps to two-week high

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(China Daily/Agencies)
Updated: 2009-11-11 08:41

Rubber climbed to a two-week high as data showed a 76-percent increase in car sales in China and global stocks rallied, boosting investor confidence that demand for the commodity used in tires will increase.

Futures in Tokyo gained as much as 1.2 percent to the highest level since Oct 23. Sales in China of cars, sport- utility vehicles and multipurpose vehicles climbed to 946,400 units in October as economic growth and stimulus measures spurred demand in the world's top auto market so far this year.

"The strong data added to optimism that car sales in China will keep rising, leading to growth in rubber demand," said Hisaaki Tasaka, an analyst at commodity broker ACE Koeki Co in Tokyo. China is the world's largest rubber consumer.

April-delivery rubber rose as much as 2.7 yen to 234.8 yen a kg ($2,610 a ton) on the Tokyo Commodity Exchange yesterday. Prices have gained 72 percent this year.

January-delivery rubber on the Shanghai Futures Exchange added 0.26 percent to 19,090 yuan ($2,797) yesterday. Prices were capped after the exchange said on Nov 6 that rubber stockpiles monitored by the bourse rose 3,784 tons to 120,697 tons, the highest level since November 2004.

China's car sales in the first 10 months rose 45.2 percent to 8.19 million, according to the China Association of Automobile Manufacturers, which released the data on Monday after the close of trade in Tokyo. China's government cut vehicle taxes and introduced subsidies in rural areas this year after vehicle demand plunged amid an economic slowdown.

Automakers, including Toyota Motor Corp, the world's largest, have raised global sales forecasts for this year partly because of growing demand in China.

Auto sales growth will continue next year, said Yale Zhang, a Shanghai-based director at auto-consulting company CSM Asia. The government will probably extend stimulus measures that are scheduled to finish at the year-end, he said.

Asian stocks extended a global rally, lifting the MSCI Asia Pacific Index for a third day. In New York, the Dow Jones Industrial Average climbed to a 13-month high on Monday after the Group of 20 nations agreed to maintain stimulus efforts.

The rally in global stocks boosted investor confidence that economic recovery will increase raw-material demand, Tasaka said.

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