KUALA LUMPUR – The local rubber market is expected to experience another week of muted demand amid stagnant sentiment.
The Malaysian Rubber Glove Manufacturers Association’s past president, Denis Low, said that despite inactivity and low production, the market did not react with a shortage fear.
“Instead, the market remains rangebound with insignificant buying interest,” he told Bernama.
Low said if rainfall continued to persist for the next few weeks, there could be some shortage problems in the local market.
Throughout this week, rubber-tapping activities were hampered by the incessant rainfalls in certain parts of Malaysia.
A trader said that in overseas markets, buyers continue to monitor China’s demand for natural rubber.
The latest projection about China’s automotive sales may provide some support to prices next week.
China Association of Automobile Manufacturers executive vice-president Fu Bingfeng was reported to have said China’s yearly auto sales might reach 40 million units.
China also recently launched a six-month campaign to boost car purchases and drive electric vehicle adoption in rural areas.
Nevertheless, the trader said the current volatility in oil prices and US interest rate fears could further cause caution among buyers.
Throughout the week, the local rubber market was mostly lower amid caution ahead of the US Federal Reserve minutes from their June meeting.
The minutes released indicated that further tightening is likely to fight inflation, causing markets to decline.
At home, the Malaysian Rubber Board’s (MRB) reference physical price for Standard Malaysian Rubber 20 (SMR 20), and latex-in-bulk slipped seven sen each to 604.5 sen per kg and 491 sen per kg on Friday from 611.5 sen per kg and 498 sen per kg respectively a week earlier.
At 5 pm on Friday, the MRB reference price for physical rubber SMR 20 stood at 609.5 sen per kg, while latex-in-bulk was at 492 sen.
— BERNAMA
