THE Malaysian rubber market is expected to see muted trading next week, as the two-week Movement Control Order (MCO) to contain Covid-19 in the country piles downward pressure on the commodity.
Malaysian Rubber Glove Manufacturers Association (MARGMA) president Denis Low said the local market would undergo high volatility due to the limited movement of people and business.
“While this act by government from March 18 until end of this month is necessary to curb the spread of the disease throughout this period, the prices and demand will have a downward tendency,” he told Bernama.
On Thursday, MARGMA urged the government to allow the rubber glove industry to run at full capacity during the MCO period. The National Security Council has imposed several conditions on manufacturers that are allowed to operate during this time, including reducing the number of employees at operational level by at least half.
The number of confirmed cases in the country has breached the 1,000 mark. Yesterday, 130 new Covid-19 cases were reported, lifting the figure to 1,030.
Low said lower closing prices on Thursday and Friday, with the benchmark Standard Malaysia Rubber 20 (SMR 20) falling to its lowest level since December 2018, would spur the prices to be even lower next week.
“Sentiment is weak and demand will be very muted as the world is almost at a standstill, especially in highly industrialised countries like China and Germany,” he added.
For the week just ended, the rubber market was traded mostly lower or mixed, tracking the weaker performance of regional markets and broader losses in the global commodity and equity markets due to fears over the economic fallout from Covid-19.
On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference physical price for SMR 20 fell 24 sen to 515.0 sen a kg, while latex-in-bulk lost 11 sen to 424.50 sen a kg. – March 21, 2020, Bernama
