Rubber Reaches Two-Week High on Chinese Car Sales, Stock Rally

Rubber Reaches Two-Week High on Chinese Car Sales, Stock Rally
Nov. 10 (Bloomberg) -- Rubber climbed to a two-week high as data showed a 76 percent increase in car sales in China and global stocks rallied, boosting investor confidence that demand for the commodity used in tires will increase.
Futures in Tokyo gained as much as 1.2 percent to the highest level since Oct. 23. Sales in China of cars, sport- utility vehicles and multipurpose vehicles climbed to 946,400 units in October as economic growth and stimulus measures spurred demand in the world’s top auto market so far this year.
“The strong data added to optimism that car sales in China will keep rising, leading to growth in rubber demand,” Hisaaki Tasaka, an analyst at commodity broker ACE Koeki Co. in Tokyo, said today. China is the world’s largest rubber consumer.
April-delivery rubber rose as much as 2.7 yen to 234.8 yen a kilogram ($2,610 a metric ton) on the Tokyo Commodity Exchange before trading at 234.3 yen at 11:07 a.m. local time. Prices have gained 72 percent this year.
China’s car sales in the first 10 months rose 45.2 percent to 8.19 million, according to the China Association of Automobile Manufacturers, which released the data yesterday after the close of trade in Tokyo. China’s government cut vehicle taxes and introduced subsidies in rural areas this year after vehicle demand plunged amid an economic slowdown.
Automakers including Toyota Motor Corp., the world’s largest, have raised global sales forecasts for this year partly because of growing demand in China.
Auto sales growth will continue next year, Yale Zhang, a Shanghai-based director at auto-consulting company CSM Asia, said yesterday. The government will probably extend stimulus measures that are scheduled to finish at the yearend, he said.
Stock Rally
Asian stocks extended a global rally, lifting the MSCI Asia Pacific Index for a third day. In New York, the Dow Jones Industrial Average climbed to a 13-month high yesterday after the Group of 20 nations agreed to maintain stimulus efforts.
The rally in global stocks boosted investor confidence that economic recovery will increase raw-material demand, Tasaka said.
January-deliver rubber on the Shanghai Futures Exchange added 0.8 percent to 19,200 yuan ($2,813) a ton at 9:39 a.m. local time. Prices were capped after the exchange said Nov. 6 that rubber stockpiles monitored by the bourse rose 3,784 tons to 120,697 tons, the highest level since November 2004.