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Rubber market set to trade range bound this week

Rubber market set to trade range bound this week

Experts say that the local rubber market is expected to trade range-bound with a bias to be slightly lower this week due to sufficient supply and good weather prevailing.

Industry expert Denis Low said the rubber supply and demand situation seems to be normalising and the earlier uncertainty caused by the weather is stabilising.

“We are now seeing more supply coming out and equalising the earlier shortage.

“The continuous global geopolitical hiccups have become a nuisance and no longer a major concern and we believe that prices will have to find their rightful equilibrium going forward,” he told Bernama.

Meanwhile, a dealer said rubber prices will continue to track the performance of the regional rubber futures markets, the strength of the ringgit against the US dollar coupled with benchmark crude oil prices amid natural rubber shortages and the expectation for higher interest rates.

“Markets operators will continue to monitor global economic data, especially for indicators that could influence monetary policy coupled with geopolitical tensions in the Middle East or further cues,” she said.

The local rubber market continued its downward trend last week as the market was pressured by the downtrend in regional rubber futures markets due to the concerns over demand for natural rubber and US interest rates staying higher for longer.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s (MRB) reference price for Standard Malaysian Rubber 20 (SMR 20) fell by 20.5 sen, or 2.7%, to 751.5 sen per kg from 772 sen last week, while latex-in-bulk fell 40 sen to 697.5 sen per kg from 737.5 sen previously.

At 5pm last Friday, the MRB reference price for physical SMR 20 stood at 756 sen per kg while latex-in-bulk was 696 sen per kg.

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