Rubber Gains for First Day in Four as Oil Boosts Rival’s Costs

By Aya Takada

May 13 (Bloomberg) -- Rubber advanced for the first time in four days after oil jumped to a six-month high, boosting the cost of making the competing synthetic product used in tires.

Futures in Tokyo increased after dropping 5.8 percent in the previous three sessions. Crude oil in New York reached the highest settlement since Nov. 11 yesterday on increased imports by China and as a weak dollar bolstered investor demand for commodities as an alternative investment.

“Rubber chased a rally in oil and other commodities,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd., said in a telephone interview today.

Natural rubber for October delivery, the most-active contract, gained 1.4 percent to 170.3 yen a kilogram ($1,772 a metric ton) on the Tokyo Commodity Exchange at 11:48 a.m. local time. The futures often move in the same direction as oil as synthetic rubber is made from naphtha, distilled from petroleum.

Gains were limited as Toyota Motor Corp., the world’s biggest automaker, expects to cut global vehicle production 28 percent this year as the recession hammers demand.

Output will fall to 6.68 million vehicles from 9.24 million in 2008, Hideaki Homma, a company spokesman, said today by phone. Sales will drop 18 percent to 7.34 million vehicles, he said. The figures include the carmaker’s Daihatsu Motor Co. and Hino Motors Ltd. subsidiaries.

“A rally in rubber prices won’t be sustained until we see evidence of a recovery in raw material demand,” Sugata said.

Rubber for September delivery on the Shanghai Futures Exchange, the most-active contract, added 1 percent to 15,505 yuan ($2,272) a ton at 11:08 a.m. local time.

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net