Rubber gained to the highest level in more than two months as credit data signaled that demand will increase in China, the world’s largest buyer of the commodity used in tires.

The contract for delivery in May on the Tokyo Commodity Exchange rose as much as 1.1 percent to 282.8 yen a kilogram ($2,757 a metric ton), the highest level for most-active futures since Sept. 24. Prices were at 281.3 yen, paring this year’s losses to 7 percent.

New yuan loans last month were 624.6 billion yuan ($103 billion), the People’s Bank of China said, compared with the 580 billion yuan median estimate in a Bloomberg survey. Aggregate financing was 1.23 trillion yuan, topping all estimates, while M2 money supply increased 14.2 percent from a year earlier.

"Higher-than-expected borrowing in China suggested that auto demand and tire demand there will continue to increase,” said Naohiro Niimura, a partner at Market Risk Advisory.

Imports of natural rubber and latex climbed to a record 270,000 tons in November, General Administration of Customs data showed. Passenger-vehicle sales rose 16 percent in November, according to China Association of Automobile Manufacturers.

The contract for May delivery on the Shanghai Futures Exchange rose 1.4 percent to 19,905 yuan ($3,276) a ton.

Thailand, the world’s biggest producer and exporter, will resume collection of fees on shipments from January after a four-month exemption, according to the Office of Rubber Replanting Aid Fund. The move may “slightly” lower domestic prices as shippers may pass on costs to farmers, Acting Director Prasit Meadsen said. The fee collection was suspended to help boost farm prices and sales.

Thai rubber free-on-board was unchanged at 82.45 baht ($2.57) a kilogram, according to the Rubber Research Institute of Thailand.

Source: Bloomberg