Oct. 15 (Bloomberg) -- Rubber jumped to the highest level in more than two weeks after China agreed to buy 200,000 tons a year from Thailand, signaling improvement in demand from the world’s largest consumer.
The contract for March delivery climbed 2.4 percent to end at 270.8 yen a kilogram ($2,752 a metric ton) on the Tokyo Commodity Exchange, the highest settlement since Sept. 26. The most-active contract pared losses to 10 percent this year.
Thai Prime Minister Yingluck Shinawatra unveiled a plan on Oct. 13 to sell the commodity to China under a government-to- government contract after meeting with Chinese Premier Li Keqiang. The purchases will start this year with unlimited years of buying, she said.
“China is moving to replenish stockpiles as the economy recovers,” said Hideshi Matsunaga, an analyst at broker ACE Koeki Co. in Tokyo. “China also increased rubber imports as part of an agreement with Thailand to boost bilateral trade.”
China’s passenger-vehicle sales rose more than analysts’ estimates in September. Wholesale deliveries climbed to 1.59 million units last month, compared with the 1.5 million-unit median estimate of five analysts surveyed by Bloomberg.
Rubber for January delivery on the Shanghai Futures Exchange ended unchanged at 21,175 yuan ($3,470) a ton. Thai rubber free-on-board gained 1.3 percent to 80.80 baht ($2.59) a kilogram today, according to the Rubber Research Institute of Thailand.
--With assistance from Supunnabul Suwannakij in Bangkok. Editors: Jarrett Banks, Thomas Kutty Abraham