KUALA LUMPUR—Natural rubber prices are expected to remain steady in the near term amid worries about tight supply in major producing countries and the anticipated improvement in demand from China.
Consumption is expected to increase 2.6 percent year-on-year between August and October, driven by government stimulus and improving economic activities in the U.S., China and other major consuming countries, the Malaysian Rubber Board said in its latest monthly NR markets update on Sept. 4.
Prices in the local market also are expected to take cues from the performance of ringgit, crude oil prices and regional rubber futures markets.
Despite positive signals, MRB said uncertainties arising from the COVID-19 pandemic are likely to weigh on prices.
Market operators, the board added, also will monitor the development of a COVID-19 vaccine as well as the progress on U.S.-China trade relation for further cues.
In August, the Kuala Lumpur rubber market trended upward, with prices surging to highest level since February toward the end of the month.
The positive sentiment, said MRB, was contributed by firmer advices from regional rubber futures markets following optimism on China's economy recovery and shortage of supply.
