Natural Rubber Gains as Oil Rally May Increase Synthetic Cost

By Dave McCombs

Aug. 21 (Bloomberg) -- Natural rubber futures in Tokyo gained for a second day, climbing from a four-month low, on a rally in oil, which is used to make the synthetic alternative.

Gains in rubber paced increases for platinum, palladium and other raw materials in Tokyo as crude rose for a third day after a report yesterday showed U.S. gasoline inventories dropped a fourth week.

``Traders are focusing on the gain in oil,'' Kazuhiko Saito, a commodity strategist at Interes Capital Management, said today in Tokyo by telephone.

Rubber for January delivery gained 1.6 percent to 302.7 yen a kilogram ($2,696 a metric ton) at 12:44 p.m. on the Tokyo Commodity Exchange. The most-active contract dropped to 295.7 yen, the lowest since April 25, on Aug. 19.

November-delivery rubber on the Shanghai Futures Exchange, the most-active contract, advanced 2.5 percent to 22,565 yuan ($3,294) a ton at 10:44 a.m., local time.

Crude oil for October delivery rose as much as $1.14, or 1 percent, to $116.70 a barrel on the New York Mercantile Exchange and was trading at $116.32 at 12:42 p.m. in Tokyo.

To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net.