Malaysian Rubber Market Likely To Remain Subdued Next Week

By Nur Athirah Mohd Shaharuddin

KUALA LUMPUR, Sept 13 (Bernama) -- The local rubber market is expected to remain subdued next week, with a tendency to move slightly lower during the holiday-shortened week.

Industry expert Denis Low said uncertainties in the global environment, particularly in European politics, suggest that a major economic downturn there is inevitable.

Additionally, he said abnormal weather conditions have been reported in several rubber-producing regions, where heavy rains over rubber estates are disrupting tapping activities and causing a lower productivity of latex.

“A weak economy is never good for a commodity like rubber and its by-products, while adverse weather is never good for productivity. As such, we are seeing two equalising factors here.

“Therefore, we anticipate a softer and muted market for rubber this week, with a slight downward bias due to these equalising factors. It will also be a rather short week with so many holidays,” he told Bernama.

He added that another major source of volatility in the marketplace is exchange rate fluctuations, with significant swings in the United States (US) dollar against other currencies creating an unfavourable environment for the market.

Meanwhile, another dealer noted that rubber prices are likely to be influenced by both regional rubber futures and movements in benchmark crude oil prices.

"Market participants are closely watching for clearer signals on the direction of the US monetary policy.

“Traders will also monitor key global economic indicators, developments in US trade tariffs, weather conditions in major natural rubber-producing countries, and ongoing geopolitical tensions,” she added.

On a week-to-week basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) fell by 15.5 sen to 737.0 sen per kilogramme (kg), while latex-in-bulk inched up by 0.5 sen to 575.5 sen per kg.

-- BERNAMA