Rubber Market Likely To Trade Sideways With Slight Downward Bias Next Week

By Fatin Umairah Abdul Hamid

KUALA LUMPUR, June 20 (Bernama) -- The Malaysian rubber market is expected to trade sideways with a slight downward bias next week as easing geopolitical tensions and mixed supply conditions shape sentiment, said industry expert Denis Low.

He told Bernama that the signing of a memorandum of understanding (MoU) between the United States and Iran on June 17 to end hostilities in the Gulf region is seen as improving global risk sentiment and restoring stability to shipping routes.

“With this stoppage of conflict, there is a seemingly free flow of shipping, and commerce has resumed cautiously for now.

“Oil flow is expected to regain normalcy in the days ahead, and with prices dropping, it will mean lower prices all round are envisaged,” said Low.

However, he said supply-side support persists amid erratic weather conditions in key producing regions.

“This kind of heavy rainfall occurring sporadically is causing a slightly tight supply situation. We believe that it is just a short situation and may soon blow over. The supply and demand situation is actually equalising itself out as demand is slower too,” said Low.

Meanwhile, the Malaysian Rubber Glove Manufacturers Association (MARGMA) said the outlook for rubber in the coming week remains mixed, as the Chinese economy looks stable while the US economy is showing signs of weakness, with the Federal Reserve keeping interest rates unchanged.

“Stronger demand for rubber gloves could also be expected to return from the Middle East, which could drive a corresponding demand for latex,” the association said.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) increased 17.5 sen to 946 sen per kilogramme (kg), while latex-in-bulk increased 13.5 sen to 794.5 sen per kg.

-- BERNAMA