Rubber climbed for a third day after data showed China’s manufacturing expanded at the fastest pace in seven months in November, boosting speculation that demand from the world’s largest user will increase. May-delivery rubber on the Tokyo Commodity Exchange gained as much as 1 percent to 363.8 yen per kilogram ($4,351 a metric ton) before trading at 361.5 yen at 12:06 p.m. The most-active contract, which reached a 30-year high of 383 yen on Nov. 11, rose 10 percent last month. The Purchasing Managers’ Index rose to 55.2 from 54.7 in October, China’s logistics federation said on its website today. That was more than the 54.8 median estimate of 14 economists surveyed by Bloomberg News. “The data from China showed the strength of its industrial production, providing support to rubber futures,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today by phone. Futures in Shanghai advanced as much as 1.5 percent to 31,345 yuan ($4,699) a ton before trading at 31,175 yuan at 11:10 a.m. local time. The price reached a record high of 38,920 yuan on Nov. 11. Chinese policy makers are seeking to sustain the nation’s expansion while taming the fastest inflation in 25 months. Shanghai’s benchmark stock index yesterday completed its first monthly loss since June on concern growth may falter because of Premier Wen Jiabao’s campaign against rising prices. Gains Limited Gains in rubber futures were limited on speculation that the European debt crisis will spread. Standard & Poor’s said it may cut Portugal’s credit ratings on concern that the government has made little progress on boosting economic growth to offset the fiscal drag from scheduled 2011 budget cuts. S&P said in a report yesterday that it placed Portugal’s A- long-term and A-2 short-term foreign and local currency sovereign credit ratings on “CreditWatch” with “negative implications.” Portugal’s credit outlook adds to concern that Europe may not be doing enough to stem its credit crisis. The move may increase pressure on Spain, which has been trying to avoid seeking a bailout like Ireland and Greece. The cash price of natural rubber in Thailand was unchanged at 131.55 baht ($4.35) per kilogram yesterday. Auctioned prices of ribbed smoked sheets rose 0.4 percent yesterday to 123.45 baht, boosted by a weakening yen and a supply shortage, according to the Rubber Research Institute of Thailand. Wet weather in southern Thailand continues to cut supply, boosting prices, the institute said. The south accounts for about 80 percent of production. Supply from the Association of Natural Rubber Producing Countries, which accounts for about 92 percent of global output, may drop 3.8 percent in the three months to Dec. 31 as rains have disrupted tapping in Thailand, the group said on Nov. 25. Output from Thailand is estimated to tumble by 28 percent during October-to-December period, which will lower production this year by 1.4 percent to 3.12 million tons, the group said. To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net; Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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