Rubber Reaches 13-Month High on Japan’s Growth, Gold’s Rally

Rubber Reaches 13-Month High on Japan’s Growth, Gold’s Rally
Nov. 16 (Bloomberg) -- Rubber climbed to a 13-month high as Japan’s economy expanded at the fastest pace in more than two years, boosting investor confidence that an economic recovery will boost demand for the commodity used in tires.
Futures in Tokyo rose as much as 1.8 percent to the highest level since Oct. 3, 2008. Rubber also gained as a weaker dollar pushed gold to a record, stoking speculation investor demand for commodities will grow, said Takaki Shigemoto, a commodity analyst at research and investment company JSC Corp. in Tokyo.
“The strong economic data spurred investors to increase holdings of risky assets, leading to a rally in gold and other commodities,” Shigemoto said today by phone.
April-delivery rubber climbed as much as 4.2 yen to 239.4 yen a kilogram ($2,672 a metric ton) on the Tokyo Commodity Exchange before settling at 236.7 yen.
Japan’s economy grew at an annual 4.8 percent pace in the third quarter, the second straight expansion. Gross domestic product accelerated from a revised 2.7 percent expansion in the three months ended June 30, the Cabinet Office said today in Tokyo. The median estimate of 20 economists surveyed by Bloomberg News was for a 2.9 percent expansion.
“The GDP data were much stronger than expected, boosting risk appetite,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA.
Thai Production
Rubber also increased on speculation that output in Thailand, the world’s largest producer and exporter, may drop as heavy rains disrupted plantation work in the southern part of the country, the main producing area, Shigemoto said.
Thai shippers raised offers for so-called RSS-3 grade rubber for December shipment to $2.46 a kilogram today from $2.43 Nov. 13, as some plantations were hit by floods, he said.
Thai rubber output may decline to between 2 million metric tons and 2.5 million tons this year because of excess rainfall, down from 3.1 million tons last year, Somchai Charnnarongkul, head of Thailand’s agriculture department, said Nov. 4.
Gold advanced to a record $1,130.43 an ounce as a weaker dollar increased the investment appeal of the metal. The dollar fell for a second day against a basket of six major currencies as Japan’s GDP data prompted investors to sell the dollar for higher-yielding currencies.
Rubber on the Shanghai Futures Exchange Futures Exchange gained as much as 1.7 percent to 20,990 yuan ($3,074) a ton, the highest level for the most-active contract since September 2008. The March-delivery contract settled at 20,800 yuan.
The market extended gains after data last week indicated that China’s economic expansion accelerated, boosting speculation demand will increase in the world’s largest consumer of natural rubber, Shigemoto said. China’s industrial production rose 16.1 percent from a year before, the most since March 2008, the statistics bureau said in Beijing Nov. 11.
The Shanghai exchange reported Nov. 13 that natural rubber stockpiles monitored by the bourse rose 9,170 tons to 129,867 tons, the highest level since November 2004.