KUALA LUMPUR — The Malaysian rubber market traded mixed this week, amid the weaker performance of regional futures markets and the Shanghai futures market.
The market was also affected by a possible increase in stocks moving forward due to the upcoming El Nino season, while demand for the commodity weakened.
However, the weakening of the market was offset by the downtrend in the ringgit against the US dollar along the week, which slightly stalled a further fall in rubber prices.
The market was also dampened by losses in oil prices on concerns over the stronger US dollar and expectation of rising US oil production. It was reported that the benchmark Tokyo rubber futures extended declines on Friday to close 6.3 per cent lower, in tracking losses on the Shanghai futures and on emerging concerns over supply following Thailand’s planned sale of the commodity.
Moving into next week, a dealer said the situation is likely to remain much the same as this week, due to concerns over whether Thailand’s government will be further disposing of stocks.
However, the market may also react to the government’s initial plan to look into the possibility of using the commodity on the Pan-Borneo highway project. Works Minister Datuk Seri Fadillah Yusof was reported as saying that three pilot projects conducted had shown some positive indications over the use of rubber as part of the materials in constructing the 1,000 kilometre highway.
He said the three trials were done on roads used by palm oil tankers, and were as such, subject to higher wear and tear than normal carriageways. On a Friday-to-Friday basis, the Malaysian Rubber Board’s official physical price for tyre-grade SMR 20 at noon fell two sen to 959 sen a kg, while latex-in-bulk rose 11 sen to 806 sen a kg.
The unofficial closing price for tyre-grade SMR 20 reduced 11.5 sen to 957.5 sen a kg, while latex-in-bulk ended 12 sen higher 706 sen a kg.
