Rubber prices surge on low supply, Shanghai hits record

Rubber climbed to the highest level in six months as persistent rainfall in key producing countries raised concerns that supplies may tighten amid increasing purchases from China, the largest buyer. Shanghai rubber advanced to a record.

Futures in Tokyo gained as much as 2 per cent to 334.6 yen per kilogram ($4,091 a tonne), the highest level since April 19, before trading at 333.4 yen at 2:22 pm local time. Shanghai futures surged as much as 4.6 per cent to a record 30,670 yuan a ton ($4,599), the Shanghai Futures Exchange said in an e-mail.

“The rubber industry remains bullish as Chinese buyers have increased purchases after National Day holidays as its inventories are still low,” said Varut Rungkhum, an analyst at Bangkok-based commodity broker Agro Wealth Ltd.

China imported 190,000 tonnes of natural rubber in September.

“The high level of China imports reflects that demand there continues to grow and will likely expand to replenish its stockpiles,” Chaiwat Muenmee, analyst at commodity broker DS Futures Co., said by phone from Bangkok. “Inventories in China and Japan remain low, while rubber supplies are limited, which will bolster prices.”

Rubber stockpiles held at Japanese warehouses expanded 26.1 per cent to 7,282 tonnes on September 20, according to data from the Rubber Trade Association of Japan released yesterday. Natural-rubber inventories climbed 5,320 tonnes to 36,900 tonnes, the Shanghai exchange said October 8.