KUALA LUMPUR, Malaysia—Natural rubber 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.
The Malaysian industry body noted in its latest market digest that this projection follows recent Association of Natural Rubber Producing Countries (ANRPC) forecasts of a tighter supply situation and improving demand outlook.
In a report issued Sept. 20, ANRPC projected NR production for 2021 to reach 13.9 million metric tons with 2-percent growth year-on-year. Global NR demand, meanwhile, was tipped to grow 9.1 percent to 14.1 million tons.
MRB said prices also were forecast to track the movement of ringgit, crude oil prices and regional rubber markets. Other factors include global-economy developments, especially in the U.S.; COVID-19 vaccination progress; and U.S.-European Union cooperation, especially on matters relating to semiconductors, the board said.
Reviewing NR price trends on the Kuala Lumpur market in September, the MRB said the commodity had "traded sideways" with a slight recovery toward the end of the month.
Mixed global economic performances linked to surging COVID-19 cases, semiconductor shortages and uncertainties over the U.S. economic stimulus package had put pressure on the market, in addition to the strengthening value of the ringgit against the U.S. dollar and the impact of energy shortages on the Chinese economy, according to MRB.
Despite these pressures, MRB added, "recovery toward month's end was supported by encouraging performance of the regional rubber futures markets, oil prices that touched a three-year high and easing pandemic conditions."