Rubber Market Ends Lower On Weaker Regional Futures, Softer China Demand

By Muhammad Fawwaz Thaqif Nor Afandi

KUALA LUMPUR, Sept 14 (Bernama) -- The Kuala Lumpur rubber market ended lower on Monday, tracking weaker regional rubber futures, with Japanese rubber futures extending losses for the fourth consecutive session, a dealer said.

She said that market sentiment was further weighed down by softer natural rubber demand from tyre manufacturers in China.

“China's all-steel tyre capacity utilisation declined to 65.71 per cent, down 0.23 percentage points week-on-week and 1.51 percentage points year-on-year.

“Meanwhile, natural rubber purchases by Chinese tyre manufacturers declined, as higher raw material costs led many companies to maintain production controls,” she told Bernama.

She said that the expectations of a United States (US) Federal Reserve rate hike, as well as concerns over the US economic outlook also dampened sentiment.

According to the dealer, expectations of a US Federal Reserve rate hike have increased following an acceleration in US consumer prices in August, supporting Goldman Sachs’ forecast of a 25-basis-point hike in September, which could strengthen the US dollar and weigh on commodity prices

She added that US consumer sentiment deteriorated in September, while inflation expectations increased, raising concerns over consumer spending and economic activity.

“Nevertheless, the decline was partially cushioned by sharply higher crude oil prices and concerns over potential supply disruptions in major Southeast Asian rubber-producing countries due to heavy rainfall amid the strengthening El Niño outlook,” she added.

At the time of writing, Brent crude rose 3.15 per cent to US$107.90 per barrel.

At 3 pm, the price of SMR 20 fell 22 sen to 976.5 sen per kilogramme (kg), while latex in bulk decreased two sen to 710.5 sen per kg.

-- BERNAMA