Rubber Gains on Speculation Car Sales Recovery to Boost Demand

By Aya Takada

Sept. 1 (Bloomberg) -- Rubber increased for a fourth day in five on speculation demand for the commodity used in tires will increase on a recovery in car sales in Japan.

Futures in Tokyo gained as much as 1.2 percent, extending a 3.9 percent increase last month. Japanese sales of new vehicles rose 5 percent from a year earlier to about 200,000 in August, the first increase since July last year, the Nikkei newspaper reported today.

“Rubber was supported by expectations for strong figures for car sales,” Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co., said today by phone.

February-delivery rubber rose as much as 2.5 yen to 205.7 yen a kilogram ($2,209 a metric ton) before trading at 205 yen on the Tokyo Commodity Exchange at 10:38 a.m. local time.

Toyota Motor Corp., the world’s largest carmaker, boosted domestic sales by 16 percent last month thanks to robust demand for its Prius hybrid cars, the Nikkei reported. Sales at Honda Motor Co. increased 20 percent, the paper said.

Rubber futures also increased as the Japanese currency retreated from a seven-week high against the dollar, raising the appeal of yen-denominated contracts, Saito said.

The yen weakened to 93.19 per dollar as of 10:48 a.m. in Tokyo from 93.12 in New York yesterday, when it touched 92.55, the strongest level since July 13.

January-delivery rubber on the Shanghai Futures Exchange lost 1.2 percent to 18,145 yuan ($2,656) a ton at 9:49 a.m. local time.

Prices dropped after stockpiles monitored by the exchange increased to the highest since March 2008, raising concern that demand in China, the world’s largest consumer, may be slowing.

Rubber inventories increased 7,577 tons to 82,517 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said Aug. 28.

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