Sept. 19 (Bloomberg) -- Rubber climbed for a third day to the highest level in more than a week after the Federal Reserve said it will maintain monthly bond purchases to stimulate growth, boosting the demand outlook for the commodity used in tires.
The contract for February delivery on the Tokyo Commodity Exchange rose 2.7 percent to end at 285.3 yen a kilogram ($2,889 a metric ton), the highest settlement for a most-active contract since Sept. 9. The rally pared losses to 5.7 percent this year.
The Federal Open Market Committee said it wants to see more evidence that improvement in the U.S. economy will be sustained before adjusting the pace of its $85 billion in monthly purchases of Treasury and mortgage debt. The decision boosted oil in New York, raising the appeal of natural rubber as an alternative to synthetic products.
“Investor appetite for the commodity increased as the Fed maintained monetary stimulus,” said Hideshi Matsunaga, an analyst at broker ACE Koeki Co. in Tokyo.
Rubber was also supported by speculation that farmer protests in Thailand may disrupt shipments from the world’s largest producer and exporter, he said.
Farmers continue blocking a road in the southern Thai province of Nakhon Sri Thammarat, Viroj Jivarungsan, the province’s governor said by phone today. Seventy-six police officers were injured and eight cars burnt in a clash on Sept. 16, Interior Minister Charupong Ruangsuwan said yesterday.
Thai rubber free-on-board gained 0.6 percent to 83.20 baht ($2.69) a kilogram today, according to the Rubber Research Institute of Thailand. The Shanghai Futures Exchange is closed today and tomorrow for holidays.
--With assistance from Supunnabul Suwannakij in Bangkok. Editors: Jarrett Banks, Ovais Subhani