Rubber Market Seen Trading Sideways With A Slight Downward Bias Next Week

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, June 6 (Bernama) -- The rubber market is expected to trade sideways with a slight downward bias next week amid ongoing global uncertainties, particularly developments in West Asia and weather conditions in some major rubber-producing regions.

Industry expert Denis Low said market sentiment remains cautious amid the ongoing conflict between the United States (US) and Iran, which has now entered its 96th day with no clear signs of a ceasefire.

“The world is grappling with uncertainties and higher oil prices, leading to inevitably higher costs for everyone. 

“We are seeing many businesses being affected by a slowdown of sorts, and a wait-and-see attitude is certainly prevailing. Less business and higher costs are truly a burden on everyone,” he told Bernama. 

He also pointed to unusual weather conditions in some major rubber-producing regions, where heavy rainfall has disrupted tapping activities, curbing production and contributing to tighter supply conditions.

Low highlighted forecasts by the Thai Meteorological Department (TMD), which expects heavy rainfall across 60 to 70 per cent of Thailand due to a strong south-westerly monsoon, while also warning the public to prepare for potential flash floods and runoff.

As for Malaysia, he said forecasts have also warned of thunderstorms, heavy rain and strong winds.

“However, we believe that it is just a short-lived and unusual condition and not much to worry about,” he added.

Low also noted that currency movements remain another key factor influencing the rubber market.

“The exchange rate remains volatile and unpredictable and will continue to have a significant effect on rubber prices. It is also causing a dilemma as the current exchange rate tends to be driven more by geopolitics than by the real economy,” he added.

Meanwhile, another dealer said rubber prices are expected to remain firm, supported by ongoing supply constraints caused by heavy rainfall and El-Nino.

“However, market sentiment is likely to stay cautious amid concerns over persistent macroeconomic uncertainties, particularly surrounding the West Asia conflict and US trade policies,” he said. 

In addition, he said traders will monitor the upcoming US payrolls data, progress towards a West Asia peace deal, trends in regional rubber futures markets and the strength of the ringgit for further cues. 

On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) rose 15 sen to 937 sen per kilogramme (kg) while latex-in-bulk inched up three sen to 762 sen per kg.

-- BERNAMA