Rubber Market Seen Remaining Sluggish Next Week On Weaker Demand From China Ahead Of CNY

By Engku Shariful Azni Engku Ab Latif

KUALA LUMPUR, Feb 7 (Bernama) -- The rubber market is expected to remain sluggish next week, with the commodity’s price moving sideways with a downward bias due to weaker demand from China ahead of the upcoming Chinese New Year (CNY) holiday period.

This is despite a lower yield due to the wintering season of rubber trees, according to industry expert Denis Low, who said the wintering of rubber trees is in season and may end in mid-March.

He said the hot weather is causing the yield to be much lower, which is rather abnormal.  "It is wise and clever to take heed of climate change as an unpredictable phenomenon, causing some shortages and may push up prices," he told Bernama.

Also, he said demand for rubber would not be vigorous as China is going to take a long break for CNY starting from next week, while market volatility as well as uncertainty over the Middle East situation would further weigh on the market. "Traders have to navigate and manage the uncertainties of weather and (potential) war in the weeks ahead. Hence, it is only logical for stockists and users to keep some stock, and this may balance out supply and demand volatility in the interim," he added.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) dropped four sen to 760.5 sen per kilogramme (kg) while latex in bulk inched up by a sen to 578.50 sen per kg.

-- BERNAMA