Rubber gained, heading for the first monthly advance since January, on optimism that demand will remain strong in Japan and the US, and China may increase purchases to replenish stockpiles.November-delivery rubber climbed 0.2% to 391.3 yen a kilogram.
“Rubber sentiment at the moment seems supported by strong demand from the U.S. and Japan,” said Roka Komiya, a rubber trader at Marubeni in Singapore. Low inventories in China also raised optimism that Chinese buyers will soon need to rebuild stockpiles, he said.
Natural-rubber inventories monitored by the Shanghai Futures Exchange fell 3,655 tonne to 10,291 tonne, the lowest level since January 2003, the bourse said on May 27.
Supply remains limited as rains persist in southern Thailand, which accounts for 80% of the country’s supply, according to the Rubber Research Institute of Thailand.
Farmers in Southeast Asia began harvesting after the low- production season. Output from the region’s major producers, which represent 92% of global supply, may miss estimates this year as supplies from Indonesia and Philippines slow, according to the Association of Natural Rubber Producing Countries.
Production may expand 4.9% to 9.94 million tonne this year, less than the 5.8% gain forecast last month, the group said in an e-mailed report on May 26.
Output may increase 5.8% in the second quarter, lower than the 10.5% estimated last month, the group said. Supply jumped 10.1% in the first three months of the year.
Import demand is expected to expand in China and Malaysia in the second quarter, although it may decline in India, the group said.
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