Rubber Market to be Influenced by OPEC+ Supply Road Map

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Rubber market to be influenced

KUALA LUMPUR (July 30): The Malaysian rubber market is expected to be influenced by the latest production road map that may be announced by the Organization of the Petroleum Exporting Countries and allies (OPEC) in their meeting next week.

The OPEC is likely to keep production unchanged during their Aug 3 meeting, as production cuts end in August, after a downtrend adjustment from May 2020.

The market may also essay to reassess the impact of the global economic slowdown and China’s Covid-19 restrictions on rubber demand on top of mounting inflation, a dealer said.

The dealer said the market will also monitor nearly fresh manufacturing sector data to be released soon.

Malaysian Rubber Glove Manufacturers Association immediate once Chairman Denis Low believes the domestic request may be heading for a speculative mode coming week, with concerned investors hedging their positions, amid rising volatility in the global and supply markets.

“The rubber market may take a big nudge to edge higher due to speculative buying and restocking activities.

“Sporadic rainfall in producing countries had made it necessary to cover stock positions so as not to be caught with inadequate supplies. It’s certainly a worrisome matter when the weather becomes unpredictable,” he told Bernama.

During the week just ended, the rubber market was mostly higher, before ending the week on a negative note after the US economy contracted unexpectedly in the second quarter, sparking fresh recession fears.

On Thursday (July 28), the Bureau of Economic Analysis announced that US gross domestic product fell at an annual rate of0.9 during the April- June period.

 A day before, China announced a stringent Covid-19 move, shutting down the metropolis of Wuhan after detecting four asymptomatic cases.

On a positive note, the Association of Natural Rubber Production Countries projected for the natural rubber market to improve further this year, as consumption is likely to expand 5.8 to 1.21 million tonnes.

On a Friday- on- Friday basis, the SMR 20 closed 1.5 sen lower at 681 sen per kg, versus682.5 sen per kg the previous week, while latex- in- bulk rose four sen to 531 sen per kg, versus its previous week’s close at 527 sen per kg.

At 5 pm on Friday, MRB’s closing price for SMR 20 stood at 678.5 sen a kg, while latex- in- bulk was at 530.5 sen a kg.

Source – theedgemarkets

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