Rubber Market Expected To Rise Next Week On Tightening Supply, Rising Oil Prices

By K. Naveen Prabu

KUALA LUMPUR, March 7 (Bernama) --  The Malaysian rubber market is expected to trend higher next week, supported by tightening supply conditions and rising concerns over the ongoing conflict in the Middle East.

The Malaysian Rubber Glove Manufacturers Association (MARGMA) said tighter supply conditions, coupled with higher crude oil prices, could support rubber prices in the coming week.

“The rubber market remained mixed this week, weighed by weaker regional rubber futures and concerns over tensions in the Middle East. However, the Iran conflict has pushed oil prices higher and is expected to lead to increased freight and logistics costs,” MARGMA told Bernama.

The association said the outlook is also supported by China’s latest economic growth plans, which target a gross domestic product (GDP) growth rate of 4.5 to five per cent, backed by planned fiscal stimulus.

Industry expert Denis Low said rubber prices are expected to hover within a tight range, with a slight downward bias.

“On the supply side, rubber output is slowing as trees enter the wintering season, which may continue until the end of March or early April. However, the resulting supply shortage could be offset by weaker demand due to the Iran conflict, leading market participants to adopt a 'wait-and-see' approach next week,” he added. 

On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) dropped 9.5 sen to 782.50 sen per kilogramme (kg) while latex in bulk surged 34 sen to 648 sen per kg.

-- BERNAMA