Rubber Futures Gain for Second Straight Week on China Demand

By Rattaphol Onsanit and Jae Hur

Feb. 6 (Bloomberg) -- Natural rubber futures advanced for a fourth day in Tokyo, driven by demand from China after the Lunar New Year holiday and optimism that a U.S. stimulus plan will boost the world’s largest economy.

Prices rose as much as 3.1 percent today and 4.3 percent this week, the second weekly advance as Chinese buyers returned after the holiday last week. The commodity, used to make car tires, also tracked gains in Asian shares amid speculation that the U.S. Congress will soon complete debate on a package to ease the financial crisis.

“Demand from China is back,” Rewat Yenchai, an analyst at Bangkok-based AGROW Enterprise Ltd. said today by phone. “Buyers are interested in rubber from Indonesia.”

Rubber for July delivery added 2.4 percent to 144.1 yen a kilogram ($1,578 a metric ton) on the Tokyo Commodity Exchange after touching 145 yen, the highest since Jan. 29.

China widened measures to bolster Asia’s second-largest economy by cutting some tariffs on raw material and component imports. Components and raw materials that “really needed to be imported” will be exempted from import duties and value-added taxes, the Chinese cabinet said in a statement on its Web site Feb. 4, without being specific.

The U.S. House passed an $819 billion stimulus plan on Jan. 28. The Senate is considering a package of spending and tax cuts of about $900 billion and a bipartisan group of senators is trying to come up with ways to pare that down.

Stimulus Package

A U.S. Treasury official yesterday said Secretary Timothy Geithner will make a speech on Feb. 9 and President Barack Obama will hold a news conference that will address the stimulus package. The MSCI Asia Pacific Index rose 1.1 percent to 83.41 at 5:35 p.m. in Tokyo.

May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, advanced 2.6 percent to 13,505 yuan ($1,976) a ton.

Rubber inventories declined 475 tons to 63,655 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said today in a report on its Web site.

To contact the reporters on this story: Rattaphol Onsanit in Bangkok at ronsanit@bloomberg.net; Jae Hur in Singapore at jhur1@bloomberg.net