By Aya TakadaMarch 4 (Bloomberg) -- Rubber rallied from a two-week low as crude oil rose and a weakening dollar revived investor interest in commodities.
Futures in Tokyo climbed for the first time in three days and gained as much as 1.8 percent. The price fell to 287.3 yen per kilogram ($3,248 a metric ton) yesterday, the lowest level since Feb. 16.
Crude oil traded near $81 a barrel after rising to a seven- week high yesterday as a U.S. government report showed that refinery operating rates climbed to the highest level since October. The dollar retreated against the euro after Greece announced spending cuts and tax increases, spurring speculation the nation can tame the European Union’s biggest budget gap.
“Rubber chased a rally in oil and metals,” Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co., said today by phone. “Gains were limited as investors want to see more signs of economic recovery” before increasing their bets on price rises, he said.
Rubber for August delivery gained as much as 5.3 yen to 295 yen before trading at 292.4 yen on the Tokyo Commodity Exchange at 11:11 a.m. local time.
Crude oil for April delivery was at $80.89 a barrel in electronic trading on the New York Mercantile Exchange. Yesterday, the contract increased 1.5 percent to $80.87, the highest settlement since Jan. 11.
The Reuters/Jefferies CRB Index of 19 commodities climbed to the highest level since Feb. 22 yesterday as the dollar weakened, increasing the investment appeal of raw materials. The euro rose after Greece approved an additional 4.8 billion euros ($6.6 billion) of deficit cuts.
Seasonal Slowdown
Rubber’s gains were limited by speculation that output during the seasonal low-production period in Southeast Asia may be higher than last year, Fujitomi’s Saito said.
Natural rubber output from key suppliers during the so- called wintering season will improve this year, boosting exports, according to a monthly report from Association of Natural Rubber Producing Countries.
Production in Vietnam, the third-largest shipper, during the period will probably grow 14 percent from a year earlier to 20,600 tons, helping raise total output this year by 6.4 percent to 770,000 tons, ANRPC said in its February report. The group represents countries accounting for 94 percent of global production.
September-delivery rubber on the Shanghai Futures Exchange added 0.2 percent to 24,335 yuan ($3,565) a ton at 10:15 a.m. local time. The price recovered after reaching 24,060 yuan on March 2, the lowest level since Feb. 12.
source - www.businessweek.com
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