The auto industry revival will give the rubber rally extra mileage, even after a jump of nearly 80% this year, but prices will stop short of 2008's multi-year highs, Commerzbank has said.

Vehicle sales in the US are improving from a recession, even after the end of government incentives to scrap old cars, while Toyota, the world's biggest automaker, earlier this month raised its global sales target.

In China, car sales jumped 45% t0 8.19m vehicles in the first 10 months of the year.

"As both car production and sales in China are expected to rise sharply, and as the world economy will continue to recovery, the price of rubber should be well supported going forward," the German bank said.

Oil factor 

However, the soft oil price, which Commerzbank believe will weaken further, will prevent prices retracing last year's peaks, when rubber hit 380 yen a kilogramme in Tokyo, their highest since at least 1990.

Rubber closed at 240 yen a kilogramme in Tokyo on Thursday, up 78% so far this year.

Lower oil prices make synthetic rubber, which already accounts for about 55% of the global market, an attractive alternative to its natural rival.

"The highs of 2008 are unlikely to be reached again," the bank said.

Weather damage

Rubber prices typically show strong correlations both to the health of the car industry, which use it for making tyres, as well as oil prices.

The decline in both leading indicators, and with demand estimated down an estimated 5.5% this year, prompted a spectacular slump in Tokyo prices to 93.3 yen per kilogramme last December – a collapse of 75% in three months.

Indonesia, Malaysia and Thailand, which account for 70% of global rubber production between them, agreed export curbs and threatened to enter futures markets in an effort to prop up prices.

Prices have also been helped by reduced forecasts for natural rubber output in 2008-09, with wet weather prompting Thailand, the world's biggest producer, to cut estimates.

India is expected to add rubber to the list, including sugar, wheat and potentially rice, of commodities of which it is resuming imports, after a 5% drop to 840,000 tonnes in output.