KUALA LUMPUR: The Kuala Lumpur rubber market is expected to trade range-bound with a slight upside bias next week due to the lower production.
Malaysian Rubber Glove Manufacturers Association’s immediate past president Denis Low said weaker output due to the El Nino effect may encourage more stocking-up activities for traders.
“Traders will replenish their inventories as they may not have enough stocks for the weeks ahead,” he told Bernama.
Besides, he said, it was reported that the World Bank had lifted China’s growth forecast to 5.6 per cent in 2023, up 0.5 percentage point from its April forecast, in the latest Global Economic Prospects.
According to him, this means better rubber consumption in the months ahead as China is the main destination for rubber.
“When there is more movement of people, it helps increase the consumption of rubber which augurs well for the farmers as well. Hence it will also drive up rubber prices in the market,” he added.
Meanwhile, another dealer said prices would continue to track the performance of regional rubber futures markets, strength of the ringgit against the US dollar and benchmark crude oil prices amid raised expectations for more Chinese stimulus to shore up its economic rebound and a pause in the US Federal Reserve’s rate hike cycle.
“Markets will be focusing on the global central banks’ policy meetings next week for further cues on their monetary policy outlook,” he said.
On a weekly basis, the Malaysian Rubber Board’s (MRB) reference physical price for Standard Malaysian Rubber 20 (SMR 20) increased by 8.5 sen to 610 sen on Friday from 601.5 sen a kilogramme (kg) a week earlier.
Latex-in-bulk surged 10.5 sen to 505.5 sen a kg from 495 sen a kg previously.
At 5 pm on Friday, the MRB’s reference price for physical rubber SMR 20 stood at 610.5 sen a kg, while latex-in-bulk was at 501 sen a kg.-Bernama