The Malaysian rubber market is likely to trade tentatively this week as investors await more news after the recent confirmation of the US quitting the Paris climate deal.
A dealer said US President Donald Trump’s withdrawal of the world’s largest economy from the deal would have an impact on global crude oil prices.“A slide in crude oil prices would make the rival synthetic rubber cheaper and lower demand for natural rubber,” he said.
He also noted that a firmer ringgit could also hamper demand for the commodity as it would become more expensive for non-ringgit holders.
However, he did not rule out a rebound taking place next week, judging from the bearish performance of the local rubber market a week earlier.
WEAKER PRICES
For the week just-ended, trading was mostly lower, tracking the weaker rubber futures prices on regional markets and stronger ringgit’s movement against the US dollar.
On a Friday-to-Friday basis, the Malaysian Rubber Board’s official physical price for tyre-grade SMR 20 at noon slid 46 sen to 611 sen a kg and latex-in-bulk eased half-a-sen to 631 sen a kg.
The closing price at 5PM on June 5 for tyre-grade SMR 20 was 20 cents lower at 612 cents per kg and latex-in-build fell six cents to 631 cent per kg.