Rubber Market To Trade Lower Next Week On Expectations Of Supply Increase

By K. Naveen Prabu

KUALA LUMPUR, Aug 1 (Bernama) -- The Malaysian rubber market is expected to trade lower next week as an increase in supply is expected to weigh on prices. 

The Malaysian Rubber Glove Manufacturers Association (MARGMA) said Southeast Asia, which accounts for most of the world’s natural rubber production, is now in its main tapping season.

“During this period, more favourable weather conditions allow farmers to harvest more rubber, resulting in a greater supply entering the market.

“When supply increases, prices tend to soften as more rubber becomes available to buyers,” MARGMA told Bernama. 

The association added that an unexpected contraction in China’s manufacturing activity in July could also weigh on rubber demand.

“China, the world’s largest consumer of natural rubber, could see weaker rubber demand as a contraction in manufacturing activity reduces factory output and raw material consumption, putting downward pressure on rubber prices,” it said. 

Meanwhile, industry expert Denis Low said prices are likely to edge lower next week, although supply and demand are expected to remain broadly steady.

“The rubber scene is consistently resilient with supply and demand entering its usual pattern of steadiness in the summer months,” he said. 

On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) remained unchanged at 892.0 sen per kilogramme, while latex in bulk fell 22.5 sen to 695.5 sen per kilogramme.

-- BERNAMA