Rubber, trading little changed, may advance for a sixth day after Federal Reserve policy makers said that the U.S. recovery is continuing, boosting investor optimism that demand for the commodity will increase. The cash price in Thailand, the top producer, remained at a record. May-delivery rubber on the Tokyo Commodity Exchange gained as much as 0.5 percent to 397.9 yen per kilogram (4,746 a metric ton) before trading at 395.8 yen at 2:44 p.m. The price climbed to a record 400.1 yen yesterday. Federal Reserve officials decided to keep their plan to expand record monetary stimulus, according to a statement. The Fed’s $600 billion of Treasury purchases are aimed at boosting a recovery that has been “disappointingly slow,” the Federal Open Market Committee said. The dollar advanced against the Japanese currency, raising the appeal of yen-based contracts. “Bullish fundamentals will support rubber prices,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today by phone. “Demand will expand on the global economic recovery, while supply will drop seasonally in coming months.” Persistent rain in Thailand, the top producer and exporter, lowered latex output, adding to concern that supply may tighten ahead of the low-production season early next year. Thai farmers reduce tree-tapping during the so-called “wintering” season, which normally starts in the main growing region in February. The cash price in Thailand remained at the all-time high of 141.05 baht ($4.69) a kilogram today, boosted by limited supply, according to the Rubber Research Institute of Thailand. “Supplies remain short and may be tightened further during the wintering season,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co. said by phone from Bangkok. Restocking Drive Users must increase rubber purchases for restocking before the low-production season starts, which will lead to a further increase in cash prices, Tasaka said. Crude-rubber stockpiles held at Japanese warehouses fell 7.6 percent to 6,816 tons at the end of last month, according to data from the Rubber Trade Association of Japan. The dollar was at 83.87 yen at 3:03 p.m. in Tokyo from 83.66 yen in New York yesterday, when it gained 0.3 percent. The U.S. currency strengthened before data today that’s expected to show U.S. factory production rose 0.3 percent in November, according to the median estimate of economists in a Bloomberg survey. U.S. retail sales increased 0.8 percent last month, more than previously estimated, the Commerce Department said yesterday. The median forecast of economists surveyed by Bloomberg was for a 0.6 percent rise. The yen also weakened after the Bank of Japan’s December Tankan report today showed an index of sentiment among large manufacturers slid to 5, from 8 in September. May-delivery rubber in Shanghai lost 1.4 percent to 35,035 yuan ($5,261) a ton after rising as much as 0.6 percent earlier today. The contract climbed to a record 38,920 yuan on Nov. 11. 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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