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Wednesday, August 17, 2022

Rubber Gains From One-Month Low as Oil Price Gain Raises Appeal

Rubber futures in Tokyo rebounded from a one-month low, snapping a four-day losing streak, as a recovery in oil eased speculation prices of competing synthetic products may decline.

The contract for delivery in April on the Tokyo Commodity Exchange added as much as 0.7 percent to 257 yen a kilogram ($2,606 a metric ton) and traded at 256.4 yen at 11:56 a.m in Tokyo. Futures reached 255.2 yen yesterday, the lowest settlement since Oct. 4 for a most-active contract.

West Texas Intermediate gained for a second day after yesterday surging the most in five weeks, as U.S. government data showed gasoline demand in the largest oil user increased to the highest level since July. Japan’s currency traded near a two-week low against the dollar before the release of U.S. growth and jobs data, raising the appeal of yen-based contracts.

“Rubber drew support from the currency and energy markets,” said Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo. “The focus is on whether U.S. data this week will add to speculation that the Fed will maintain stimulus to support an economic recovery.”

The U.S. economy probably grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent gain in the previous period, shows a Bloomberg survey before today’s report. Economists predict data Nov. 8 will show payrolls climbed by 120,000 in October and theunemployment rate increased to 7.3 percent from 7.2 percent in the previous month.

Rubber for May delivery on the Shanghai Futures Exchange added 0.3 percent to 19,480 yuan($3,198) a ton. Thai rubber free-on-board dropped 0.4 percent to 77.55 baht ($2.48) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: Bloomberg

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