Rubber market seen trading range-bound with upside bias
The Malaysian rubber market is expected to trade range-bound with a slight upward bias as rainy days in rubber-producing regions are hampering rubber tapping and reducing the latex yield.
The Malaysian Rubber Glove Manufacturers Association’s past president Denis Low said the market would also be supported by sporadic buying and replenishment of stocks based on current usage ahead of the Chinese New Year holidays.
“The wintering of rubber trees, which normally takes place from end-February until endApril, will further reduce rubber production and this may cause prices to be volatile. Hence, it will be a thinking week for rubber traders while prices may be range-bound with a tendency to move upward in the weeks ahead,” he told Bernama.
Low said the volatility of the exchange rate and oil prices would have a significant effect on rubber prices. “Also the global economic outlook is still sluggish and this means a more measured approach to rubber trading,” he added.
Meanwhile, a dealer noted the local rubber market retreated as sentiment was dampened by the less encouraging Chinese economic data amid rising concerns over escalating geopolitical tensions in the Middle East.
“Sentiment was also affected after the US Federal Reserve delayed further market expectations of rate cuts in March as the American economy remained strong amid patchy global factory performance.
Nevertheless, further losses were capped by the upgraded 2024 global growth forecast by the International Monetary Fund and as China reaffirmed its efforts toward economic recovery,” she said.
Throughout the week, the local rubber market was mostly positive with the overall bulk latex surging by 5.56 per cent while the Standard Malaysian Rubber 20 (SMR 20) posted marginal gains of 0.14 per cent.
On a Friday-to-Friday basis, the Malaysian Rubber Board’s (MRB) reference price for SMR 20 closed at 710.0 sen per kg compared to the previous week’s close at 722.50 sen, for a decrease of about 1.73 per cent.
Bulk latex closed 3.9 per cent higher at 652.0 sen per kg versus the previous week’s close of 627.0 sen per kg.
At 5pm, the MRB reference price for physical rubber SMR 20 stood at 708.50 sen per kg while latex-in-bulk was 654.0 sen per kg. — Bernama