Rubber Market Seen Trending Higher Next Week On Stronger Demand

By K. Naveen Prabu

KUALA LUMPUR, March 28 (Bernama) -- The rubber market is expected to trend higher next week, supported by stronger demand for the commodity amid supply disruptions in the global synthetic rubber segment, according to the Malaysian Rubber Glove Manufacturers Association (MARGMA).

MARGMA said the market is currently facing a severe shortage of nitrile butadiene rubber (NBR) latex following the ongoing blockade of the Strait of Hormuz, which has disrupted global shipping routes and pushed Brent crude oil prices above US$100 per barrel.

“As NBR is derived from petroleum and serves as the primary raw material for nitrile gloves, the crisis has directly affected both its availability and cost, while also impacting chemicals used in glove production as well as plastic packaging materials.

“This may boost demand for natural rubber, signalling an upward trajectory for next week, with prices likely to follow regional rubber futures and remain supported by tight supply amid the ongoing West Asia conflict,” the association told Bernama.

However, industry expert Denis Low expects the market to be soft next week, with prices and demand moving sideways, albeit with a slight upward bias.

“Shortages of naphtha and butadiene are affecting nitrile latex production, inadvertently prompting many glove users to switch to natural rubber latex gloves, thereby slightly increasing bulk latex demand. However, the market has become sluggish and cautious due to the war, and rubber is among the commodities affected,” he said.

On a weekly basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) increased 44.5 sen to 803 sen per kilogramme (kg) while latex in bulk surged 12.5 sen to 689.50  sen per kg. 

-- BERNAMA