Rubber Market Likely To Face Volatility Next Week As New US Tariffs Take Effect

By K. Naveen Prabu

KUALA LUMPUR, Aug 9 (Bernama) -- The Malaysian rubber market is expected to experience volatility next week as new United States (US) tariffs take effect, according to the Malaysian Rubber Glove Manufacturers Association (MARGMA). 

It believes that the newly imposed tariffs could signal a slowing US economy, as the tariffs are expected to drive up the cost of imported raw materials.

However, MARGMA noted that the 7.2 per cent surge in China’s exports in July, together with growth in its services sector driven by strong demand and new export orders, could lend support to higher prices.

“This, coupled with heavy rains anticipated in a major rubber-producing nation like Thailand, could put upward pressure on prices,” the association’s spokesperson told Bernama. 

Meanwhile, industry expert Denis Low said the market is expected to trade sideways next week, with activity focused on replenishment, which may limit any increase in demand and prices.

“The supply and demand remain cautious, and for now, the market is reacting to a need-and-replenishment mode rather than the speculative environment that is the hallmark of commodity trading.

“For this reason, the momentum will be influenced by tariffs and weather conditions,” he said.

On a week-to-week basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) rose by 11 sen to 726.00 sen per kilogramme (kg), while latex in bulk increased by two sen to 569.00 sen per kg.

-- BERNAMA