Rubber Advances as Car Sales Rise, China May Increase Imports

Rubber Advances as Car Sales Rise, China May Increase Imports
Dec. 16 (Bloomberg) -- Rubber advanced for a fourth day on speculation rising car sales will boost demand for tires and lower tariffs may increase imports by China.
Futures in Tokyo gained as much as 3 percent, reaching the highest level in a week. China, the largest consumer, will cut tariffs on natural rubber imports in 2010 in line with its World Trade Organization commitments, the Ministry of Finance said yesterday. European car sales surged 27 percent last month, according to the European Automobile Manufacturers’ Association.
“News about China is positive for the market as its tariff reduction may stimulate imports,” Hisaaki Tasaka, an analyst at Tokyo-based commodity broker ACE Koeki Co., said today by phone. “Rising car sales also raised speculation that rubber demand from tire makers will increase.”
Rubber for May delivery, the most-active contract, gained as much as 7.7 yen to 260.9 yen per kilogram ($2,910 a metric ton) on the Tokyo Commodity Exchange, the highest since Dec. 8. It traded at 260.8 yen at 12:15 p.m. local time.
China’s volume-based tariffs will be “appropriately lowered” next year, the Ministry of Finance said yesterday without elaborating. Importers must choose between paying the duty according to the import volume or the price, according to the ministry’s statement.
China’s natural rubber imports rose to 120,000 tons in November from 100,000 tons the previous month, according to government data.
Car Sales
November car sales in Europe rose to 1.18 million from 933,458 a year earlier, the European Automobile Manufacturers’ Association said yesterday. Growth in new car registrations accelerated from 11.2 percent in October and 6.3 percent in September as vehicle-scrapping incentives boosted demand in the U.K., France and Spain.
Vehicle production in Japan will increase to 8.98 million units in 2010 from the 7.89 million estimated for this year, according to the Japan Automobile Tyre Manufacturers Association. Tire demand will rise 7 percent to 109 million units next year, the association said on its Web site.
“Rubber is supported by expectations that economic growth will accelerate next year, leading to an increase in the raw material demand,” ACE Koeki’s Tasaka said.
Rubber climbed to a 14-month high of 264.7 yen on Dec. 7 on speculation heavy rain would slash production in Thailand. Four southern provinces hit by flooding late November have returned to normal, the Royal Irrigation Department said last week.
Rubber for March delivery on the Shanghai Futures Exchange climbed 2.8 percent to 22,315 yuan ($3,268) a ton at 11:15 a.m. local time