Rubber Market Ends Lower Amid Weaker Regional Futures

By Danni Haizal Danial Donald

KUALA LUMPUR, Oct 21 (Bernama) -- The Kuala Lumpur rubber market ended lower on Wednesday, tracking weaker regional rubber futures amid expectations of easing raw material costs in Thailand and subdued downstream demand, a dealer said.

She said the continued build-up in inventories in Qingdao, China, as well as below-normal tyre production rates and reduced buying interest from manufacturers had put further pressure on prices.

“Expectations of a United States Federal Reserve (US Fed) interest rate hike in December added to market uncertainty,” she told Bernama.

She said prices of raw materials in Thailand were expected to ease in October, potentially reducing cost support for natural rubber.

“Meanwhile, Chinese tyre production is expected to remain below previous years’ levels, while manufacturers continue to reduce finished-product inventories, reflecting subdued demand.

“Chinese upstream factories reduced raw material purchases at elevated prices, while downstream manufacturers maintained low material inventories, reflecting weak demand,” she said.

She added that the US Fed is expected to keep interest rates unchanged in October but resume rate hikes in December, which may strengthen the US dollar and weigh on commodity market sentiment.

At 3 pm, the Malaysian Rubber Board’s Standard Malaysian Rubber 20 (SMR 20) price decreased 10 sen to 1,037 sen per kilogramme (kg), while bulk latex slipped five sen to 791.5 sen per kg.

-- BERNAMA