Rubber Market Expected To Trend Higher Next Week Amid Supply Constraints

By Muhammad Fawwaz Thaqif Nor Afandi

KUALA LUMPUR, Oct 10 (Bernama) -- The Kuala Lumpur rubber market is expected to trend higher next week, amid supply constraints in rubber-producing regions ahead of the monsoon season.

Industry expert Denis Low said the unseasonal strong winds and rainfall in rubber-producing regions affected productivity and curtailed the supply of bulk and dry rubber.

“We shall see more vigorous buying and stocking ahead of the November monsoon. Prices would move up correspondingly with the supply and demand dynamics,” he told Bernama.

He said the shortage of latex in bulk also prompted speculative buying, which could further push prices upwards.

Meanwhile, the Malaysian Rubber Glove Manufacturers Association (MARGMA) expects the rubber market to trade mixed and remain range-bound next week, as market sentiment is influenced by developments in China, inflation expectations in the United States and supply chain disruptions.

The reopening of China's market post National Day holidays could support buying interest, while higher US inflation expectations could lead to further interest rate increases, MARGMA said.

“The lingering after-effects from severe flooding in major producing regions like Thailand continue to disrupt supply chains and logistics.

“Combined with ongoing implementation challenges surrounding the European Union Deforestation Regulation (EUDR), these factors may further push trade toward less-regulated markets,” it said.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for SMR 20 increased 16.5 sen to 1,061 sen per kilogramme (kg), while latex in bulk rose 19.5 sen to 769 sen per kg.

-- BERNAMA