Rubber futures climbed for a second day as a rally in oil raised the appeal of the commodity as an alternative to synthetic products used to make tires.
The contract for delivery in July gained as much as 0.6 percent to 333.6 yen a kilogram ($3,574 a metric ton) and was little changed at 332 yen on the Tokyo Commodity Exchange at 11:12 a.m. Futures have increased 9.8 percent this year.
Oil in New York traded near the highest level in more than a week after data from the American Petroleum Institute showed crude inventories fell last week, the first drop in six. Higher oil adds to the cost of producing synthetic rubber.
“Rubber chased a rally in oil amid speculation the global economic recovery will boost demand for industrial commodities,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone today.
Gains in futures were limited as Japan’s currency rebounded from an almost three-year low against the dollar, making yen- denominated contracts less attractive to investors, he said.
The yen traded at 93.33 after an unidentified Group of Seven official said Japan will be discussed at the G-20 meeting amid concern the currency’s moves have been excessive. The Bank of Japan starts a two-day policy meeting today.
The Shanghai Futures Exchange is closed this week for holidays. Natural-rubber inventories rose 1,201 tons to 100,015 tons, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said Feb. 8.
Thai rubber free-on-board added 0.5 percent to 97.85 baht ($3.28) a kilogram yesterday, according to the country’s Rubber Research Institute.
Source: Bloomberg
