Rubber rose for the first time in three as prices close to the lowest level in more than two months attracted buying interest.
The contract for delivery in August advanced as much as 1.8 percent to 289 yen a kilogram ($3,095 a metric ton) and was at 288 yen on the Tokyo Commodity Exchange at 11:34 a.m. Futures closed yesterday at 283.9 yen, the worst since Dec. 20. The 14- day relative strength index hit 30 yesterday, signaling the commodity was oversold and poised for a rebound.
Rubber has lost 4.8 percent this year as stockpiles at warehouses in China and Japanincreased. Inventories registered with the Shanghai Futures Exchange climbed to 103,299 tons at the end of February, the highest since March 2010. China is the largest user. Tocom-monitored inventories more than doubled this year to 8,659 tons.
“Today’s price increase is unlikely to sustain, and is more technical in nature after the slump,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co., said today from Tokyo. “China stockpiles are very high and those in Japan are rising. This factor will continue to cap prices around 300 yen.”
China kept its economic-growth target at 7.5 percent for 2013 while setting a lower inflation goal of 3.5 percent, Wen Jiabao said in a report that he’s reading to almost 3,000 lawmakers at the annual meeting of the National People’s Congress in Beijing today, his final address as premier. An annual expansion target of 8 percent was in place from 2005 to 2011.
“China’s growth target for this year is not that high and unlikely to boost consumption in a significant way,” said Gu.
The contract for September delivery on the Shanghai Futures Exchange gained 1.3 percent to 24,250 yuan ($3,897) a ton. Thai rubber free-on-board was unchanged at 88.75 baht ($2.98) a kilogram yesterday, according to the Rubber Research Institute of Thailand.