Rubber advanced to the highest level since February 1980 as rains in Thailand, the largest exporter, curbed production, potentially disrupting shipments. May-delivery rubber gained to as high as 385.50 yen per kilogram ($4,612 per ton) on the Tokyo Commodity Exchange before ending the so-called night session at 384.50 yen. Trading in this session is settled on Monday. Cash rubber prices climbed to a record after heavy rain and flooding reduced output in Thailand and other Asian producers, according to the Rubber Research Institute of Thailand. The price will likely extend gains as latex production in the country starts a seasonal decline as early as next month, said Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co. “The market is fundamentally bullish as shipments from Thailand will decline further,” he said by phone earlier today. Cash rubber was at 137.05 baht ($4.56) per kilogram yesterday, matching a record reached on Dec. 8, the Thai research institute said on its website. The Thai market is closed for holiday today. Gains in futures were limited amid concern that China may end tax incentives for cars, weakening demand for the commodity used in tires, Tasaka said. China, the world’s biggest car market, may end tax incentives for buying passenger cars next year, said Xiong Chuanlin, vice secretary-general of the China Automobile Industry Association. Passenger-car deliveries to dealers rose to a monthly record in November. China Car Sales The Chinese government cut a 10 percent tax on car sales to 5 percent in 2009 and then raised the rate to 7.5 percent this year. The policy, along with subsidies for car sales in rural areas and incentives to trade-in older models, will expire at the end of this month. Sales of passenger cars including multipurpose and sport- utility vehicles increased 29.3 percent to 1.34 million last month, higher than the previous record of 1.32 million in January, according to the China Association of Automobile Manufacturers. The pace of growth was the fastest since April. After the market closed, China ordered lenders to park more money with the central bank for the third time in five weeks to counter the threat from inflation after November’s lending and trade surplus topped analysts’ estimates. Reserve requirements will increase 50 basis points starting Dec. 20, the People’s Bank of China said on its website today. May-delivery rubber in Shanghai closed up 2.1 percent at 33,805 yuan ($5,081) a ton. The most active contract reached a record 38,920 yuan on Nov. 11. To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net; To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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