Rubber Market Likely To Trend Lower Next Week Amid Oversupply
By Durratul Ain Ahmad Fuad
KUALA LUMPUR, Nov 7 (Bernama) -- The Kuala Lumpur rubber market is expected to trade at a slower and weaker pace, with prices likely to trend lower amid oversupply and seasonally favourable weather conditions ahead of the monsoon.
Industry expert Denis Low said Thailand’s Meteorological Department had forecast sporadic heavy rain in several provinces, while Malaysia’s weather department had issued warnings of thunderstorms, heavy rain and strong winds in several parts of the country.
“Demand is still there without the speculative buying, bearing in mind the impending monsoon season ahead.
“It is for sure that tapping yields ought to improve with more rubber being produced. It must be noted that rubber production in most producing countries is also seeing good tapping yields,” he told Bernama.
He said favourable weather conditions over the coming weeks are expected to improve rubber yields, creating a buyer’s market. Stock replenishment is likely to continue at a steady pace amid limited speculative buying.
For the week just ended, the rubber market traded mostly lower, pressured by losses in regional rubber futures markets, lower benchmark crude oil prices and a slightly stronger ringgit against the US dollar.
Meanwhile, another dealer said rubber prices are expected to remain sensitive to weather-related supply risks in major producing countries, particularly as the strengthening El Niño raises the likelihood of drier conditions and potential disruptions to natural rubber production in the coming months.
“However, subdued demand from downstream industries, particularly in China, and uncertainties surrounding global economic growth may limit further gains,” she said.
She added that crude oil prices are likely to remain volatile, as hopes of easing tensions between the United States and Iran could weigh on prices, while persistent risks to shipping through the Strait of Hormuz could provide support.
“Market participants will also monitor developments in US policy following the midterm elections, the expiry of the US-China trade truce, ongoing European Union-China trade relations, movements in regional rubber futures markets, and the ringgit against the US dollar,” she said.
On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) went down 38.5 sen to 955.50 sen per kilogramme (kg), while latex in bulk slipped 19 sen to 768.50 sen per kg.
The Kuala Lumpur rubber market will be closed on Monday, Nov 9, for the Deepavali replacement holiday and will resume operations on Tuesday, Nov 10.
-- BERNAMA