MRB sees mixed outlook for rubber prices

Kuala Lumpur – Natural rubber (NR) prices are likely to trade “in a tight range” as the spread of Covid-19 variants slowed economic recovery especially in the Asia Pacific region, according to the Malaysian Rubber Board (MRB).

This is despite recent Association of Natural Rubber Producing Countries (ANRPC) forecasts of a tighter supply situation and improving demand outlook, the Malaysian industry body noted in its latest market digest. 

In a report issued 20 Sept, ANRPC projected NR production for 2021 to reach 13.9 million tonnes with 2.0% growth year-on-year. Global NR demand, meanwhile, was tipped to grow 9.1% to 14.1 million tonnes. 

Prices, said MRB, were also forecast to track the movement of ringgit, crude oil prices and regional rubber futures markets.

Other factors, it said, include: “global-economy developments especially in US; Covid-19 vaccination progress; and US-EU cooperation especially on matters relating semiconductor.”

Reviewing NR price trends on the Kuala Lumpur market in September, MRB said the commodity had “traded sideways” with a slight recovery towards the end of the month. 

The market, it stated, was influenced by mixed global economic performance linked to surging Covid-19 cases, semiconductor shortages and uncertainties over the US economic stimulus package.

A strengthening in the value of the ringgit against the US dollar and the impact of energy shortages on the Chinese economy further pressured the market, reported MRB. 

Nevertheless, it added, that "recovery towards month end was supported by encouraging performance of the regional rubber futures markets, oil prices that touched a three-year high and easing pandemic conditions.”