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| Oil helps increase rubber's appeal |
| Bloomberg / May 26, 2009, 00:14 IST |
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Rubber increased for the first time in three days as a rally in oil raised the appeal of the commodity as an alternative to synthetic products used in tyres.
Futures in Tokyo gained as much as 2.6 percent after losing 1.7 per cent last week. Crude oil rose as much as 0.8 per cent as OPEC ministers prepare to review production levels and the dollar traded near a four-month low against the euro. Higher oil is positive for the price of natural rubber as rival synthetic products are made from naphtha, distilled from petroleum.
“Rubber drew support from the strength of oil and other commodities,” Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today by phone.
Natural rubber for October delivery, the most-active contract, gained 2.1 per cent to 164 yen a kg ($1,734 a tonne) on the Tokyo Commodity Exchange.
Futures also advanced on speculation a weakening dollar may boost investment demand for commodities as alternative assets, Shigemoto said. The Reuters/Jefferies CRB Index of 19 raw materials gained 0.7 per cent on May 22 after reaching the highest since November on May 20.
The euro traded near the strongest level this year aga-inst the dollar before a report economists say will show German business confidence extended a rebound from a 26-year low, boosting demand for the currency.
In the cash market, Thai shippers offered RSS-3 grade rubber for July shipment at $1.65 a kg today, compared with $1.63 on May 20, Shigemoto said.
Rubber for September delivery on the Shanghai Futures Exchange, the most-active contract, added 0.7 per cent to 14,865 yuan ($2,179) a tonne.
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