Rubber Market To Trade Range-bound Next Week, Tracking Tight Supply Situation Due To Weather Disruptions -- Expert

By Engku Shariful Azni Engku Ab Latif

KUALA LUMPUR, Nov 30 (Bernama) -- The local rubber market is expected to trade range-bound with a tendency to be higher mainly due to a tight supply situation from the weather disruptions, said industry expert Denis Low.

He said rubber tapping and collecting activities may further be hampered by the incessant rainfalls which could trigger a shortage.

“The limited availability due to supply constraints may further support the upward momentum of the natural rubber prices,” he told Bernama.

Meanwhile, Low said the return of Donald Trump to the White House has put millions of Chinese exporters on the edge.

On the campaign trial, Trump had floated the idea of imposing additional tariffs of 60 per cent or more on Chinese goods sold to the US.

“Hence, it may prompt the other buyers to increase their rubber imports to boost their exports in anticipation of higher tariffs in the future,” he said.

Low noted that geopolitical risks would continue to be sources of uncertainty for the global economy and may cause volatility in oil and gas prices.

“The US dollar remains volatile due to ongoing de-dollarisation, however it is expected to remain within a range and its share remains elevated compared to other currencies,” he said.

On the other hand, the Malaysian Rubber Glove Manufacturers Association (MARGMA) said the rubber market is likely to remain volatile and track performance of regional rubber futures markets.

The association said the improving Chinese demand, geopolitical developments and global economic indicators may also support the uptrend of prices and set the market's direction in the coming week. 

“Critical flood conditions particularly in Thailand and some parts of Malaysia are expected to disrupt natural rubber (NR) production.

“This coupled with the improving Chinese economic data and potential fiscal stimulus measures could further boost demand for NR,” it said.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) increased by 34.5 sen to 879 sen per kilogramme (kg), while latex-in-bulk slid eight sen to 673.5 sen per kg.

At 5 pm yesterday, the price of SMR 20 stood at 875.5 sen per kg and latex-in-bulk was at 672 sen per kg.

-- BERNAMA