Rubber Gains for Third Week on Low Thailand Production Concerns Share Business

Rubber Gains for Third Week on Low Thailand Production Concerns Share Business

Feb. 26 (Bloomberg) -- Rubber advanced for a third week as concerns over supply shortages during the low-production season in Thailand and rising crude oil prices boosted the appeal of the commodity used in tires.

Futures in Tokyo gained as much as 0.8 percent to 296.9 yen a kilogram ($3,326 a metric ton) after declining by 0.6 percent. The yen-based contract reached 303.4 yen on Feb. 24, the highest level since Jan. 20, and has added 0.5 percent this week.

“Fundamentally, low supply in Thailand will continue to support prices,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok. Still, “the market is in consolidation mode amid a lack of fresh factors.”

Thailand is entering the low-production season, which normally begins in the nation’s main growing areas in late March. Rubber trees shed leaves and latex output slows during the season, known as wintering, reducing the raw material supply.

“Supplies in Thailand are tight” and there are lots of buyers, Roka Komiya, trader at Marubeni Corp. said by phone from Tokyo. “That’s sustaining the price.”

Rubber for August delivery, the most-active contract, advanced 0.5 percent to settle at 296.1 yen on the Tokyo Commodity Exchange.

Thai rubber auction prices declined today after 12 straight days of gains, pressured by crude oil’s drop yesterday, according to the Rubber Research Institute of Thailand. “Limited supply cushioned the downside of the local price fall,” the institute said on its Web site today.

The auctioned price of unsmoked sheets dropped 0.6 percent to 100.80 baht ($3.05) per kilogram. Ribbed smoked sheets declined 0.8 percent to 105.27 baht a kilogram, according to the organization.

May-delivery rubber on the Shanghai Futures Exchange fell 0.5 percent to settle at 24,850 yuan ($3,640) a ton. It climbed to 25,450 yuan yesterday, the highest level since Jan. 21.