Kuala Lumpur: The local rubber market is expected to experience muted demand next week due to global economic uncertainties following the 'hanging' United States (US) tariffs, which are still on a 90-day pause.
According to BERNAMA News Agency, industry expert Denis Low stated that the on-and-off-again nature of US tariffs has upended global trade and roiled financial markets, leaving caution among market traders. Low indicated that the prevailing sentiment will affect the demand for most commodities, including rubber, with transactions mostly based on locked-in contracts and replenishment only.
Low anticipates the rubber market to remain relatively quiet, moving sideways with a bias towards lower prices. He highlighted the volatility in exchange rates and the challenges businesses face in deciding whether to hedge or risk losses due to daily fluctuations, noting the costs involved in hedging.
Additionally, Low mentioned warnings from the Malaysian Meteorological Department (MetMalaysia) about thunderstorms, heavy rain, and strong winds in parts of Peninsular Malaysia and Sabah. The Thai Meteorological Department (TMD) has also forecasted thundershowers across Thailand, with isolated heavy rains likely in the country's Northeast, Eastern, and Southern (west coast) regions.
Meanwhile, the Malaysian Rubber Glove Manufacturers Association (MARGMA) commented on the expected mixed trend in the rubber market next week as US-China trade talks continue. They noted the impact of China's shrinking manufacturing sector and the revised Asia Pacific gross domestic product growth forecast of four per cent in 2025. However, they also pointed out that rubber prices will be influenced by the disrupted natural rubber supply in major producing countries due to the wet weather season and regional rubber futures markets.
For the week just ended, the Kuala Lumpur rubber market traded mixed. The Malaysian Rubber Board's reference price for Standard Malaysian Rubber 20 (SMR 20) decreased by 7.5 sen to 691.0 sen per kilogramme (kg), while latex in bulk dropped by 19 sen to 601.5 sen per kg.