KUALA LUMPUR — The Malaysian rubber market is expected to stage a downtrend pattern next week as mounting concern over high inventories might curb demand for the commodity next week, a dealer said.
He said the performance of the Tokyo Commodity Exchange (TOCOM) futures, which recorded a straight four-day of losses since Tuesday due to worries over excess supplies, would influence the movement on the local market.
“Sentiment in the local market will likely follow suit the benchmark TOCOM,” he told Bernama, adding that the performance of other commodities, especially oil prices could also weigh on the rubber market next week.
On Friday, oil prices declined as Russia and the Organisation of the Petroleum Exporting Countries mulled gradually increasing output after withholding supplies since 2017.
Meanwhile, the Association of Natural Rubber Producing Countries said the world rubber consumption increased 5.5 per cent year-on-year to 4.6 million tonnes during the first four months of 2018 (4M18).
However, world production of rubber increased only by a marginal 2.6 per cent to 4.0 million tonnes during the same period, the association said in its monthly report released Thursday.
For the week just ended, the local rubber market finished strong compared to last week amid a volatile ringgit versus the US dollar performance.
On a Friday-to-Tuesday basis, the Malaysian Rubber Board’s noon price for tyre-grade SMR 20 rose 10 sen to 569 sen per kg from 559 sen per kg last week, while latex-in-bulk chalked up 14.5 sen to 500 sen per kg from 485.5 sen per kg.
The 5 pm unofficial closing price for SMR 20 gained eight sen to 570.5 sen a kg from 562.5 sen a kg, while latex-in-bulk improved 15.5 sen to 501 sen a kg from 485.5 sen a kg.