Shares of Goodyear Tire & Rubber Co. and Cooper Tire & Rubber Co. rose as a global rubber deficit is projected to turn into a surplus in the second half, driving down the price tiremakers pay for the raw material.
Goodyear, based in Akron, Ohio, increased 5.7 percent to $11.54 a share at 3:03 p.m. in New York, after gaining as much as 7.6 percent, the largest intraday increase since May 16. Cooper Tire, based in Findlay, Ohio, rose 2.6 percent to $17.14 after increasing as much as 4 percent.
The rubber surplus will reach 402,000 metric tons in the second half, from a 134,000-ton deficit in the first six months, said Chris Pardey, a former commodities trader at Cargill Inc. and Noble Group Ltd.
Futures, which entered a bear market last month, will drop a further 20 percent to 200 yen a kilogram ($2,534 a metric ton) in Tokyo by the end of the year, the lowest since October 2009, according to the median of 15 analyst and trader estimates compiled by Bloomberg. This quarter’s 23 percent decline is the worst since the global financial crisis in 2008.
© Copyright 2015 Bloomberg News. All rights reserved.