Kuala lumpur: 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.
According to BERNAMA News Agency, the world is grappling with uncertainties and higher oil prices, leading to inevitably higher costs for everyone. Many businesses are experiencing a slowdown, and a wait-and-see attitude is prevailing, with less business activity and higher costs burdening everyone. Unusual weather conditions in some major rubber-producing regions, where heavy rainfall has disrupted tapping activities, are 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 percent of Thailand due to a strong south-westerly monsoon, warning the public to prepare for potential flash floods and runoff. As for Malaysia, forecasts have also indicated the potential for thunderstorms, heavy rain, and strong winds. However, Low believes these are short-lived and unusual conditions and not much to worry about.
Currency movements remain another key factor influencing the rubber market. The exchange rate remains volatile and unpredictable, significantly affecting rubber prices. It is causing a dilemma as the current exchange rate tends to be driven more by geopolitics than by the real economy.
Meanwhile, another dealer noted that rubber prices are expected to remain firm, supported by ongoing supply constraints caused by heavy rainfall and El-Nino. Market sentiment is likely to stay cautious amid concerns over persistent macroeconomic uncertainties, particularly surrounding the West Asia conflict and US trade policies. 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.