KUALA LUMPUR: The Kuala Lumpur rubber market is expected to trade higher this week on expectation of supply shortages.
Malaysian Rubber Glove Manufacturers Association’s immediate past president Denis Low said unpredictable weather condition in rubber producing regions has hampered production and may push up prices.
“The market is poised to experience a lower output during this period. Further stocking activities cum the usual replenishment process may take a slightly heightened interest in the weeks ahead,” he told Bernama.
Hence, he expects the rubber market to trade more aggressively ahead of the bad weather and the uncertainties, resulting in higher demand and better prices this week.
Low also said that the current US dollar volatility against other currencies is also another factor leading consumers to create a buffer and buy the commodity.
“Such a situation will mean further stocking up of currencies and commodities,” he added.
Another dealer said prices will continue to track the performance of regional rubber futures markets, the strength of ringgit against the US dollar and benchmark crude oil prices.
“Market traders are keeping on eye for further signs of economic recovery from China and the latest update on the US banking crisis,” he said.
On a weekly basis, the Malaysian Rubber Board’s (MRB) reference physical price for Standard Malaysian Rubber 20 (SMR 20) fell by nine sen, or 1.51 per cent, to 605 sen from 596 sen a kilogramme (kg) registered on Friday the previous week.
However, latex-in-bulk rose 2.5 sen to 485.5 sen a kg from 483 sen a week earlier.
At 5 pm on Friday, the MRB reference price for SMR 20 stood at 604.5 sen a kg, while latex-in-bulk was 486.5 sen a kg. – BERNAMA
