SMR 20 Extends Rally as Weather Risks and China Stimulus Lift Kuala Lumpur Rubber Market

Key Moments

The Kuala Lumpur rubber market ended mixed, with SMR 20 continuing its uptrend on support from regional futures.
China’s latest stimulus measures and concerns over supply disruptions in major rubber-producing countries bolstered sentiment.
Gains were capped by weaker crude oil prices following news of a US deal to import US$2 billion of Venezuelan crude.

Regional Support Drives SMR 20 Higher

By Muhammad Fawwaz Thaqif Nor Afandi and Durratul Ain Ahmad Fuad

KUALA LUMPUR, Jan 7 (Bernama) — The Kuala Lumpur rubber market closed on a mixed note on Wednesday, as prices for Standard Malaysian Rubber (SMR) 20 extended their upward move, buoyed by gains in regional rubber futures, according to a dealer.

The dealer noted that the positive tone in SMR 20 was largely aligned with strength in surrounding rubber markets, which provided a firm backdrop for the benchmark grade.

China Stimulus and Weather Concerns Support Sentiment

She said overall sentiment improved on the back of China’s latest stimulus measures, which lent support to demand expectations. At the same time, persistent wet weather in key natural rubber-producing countries heightened worries over tighter raw material supplies.

However, she added that the market’s upside was restrained by softer crude oil prices, which limited further advances in rubber prices.

Thailand Weather Warnings Fuel Price Pressures

“The Japanese rubber futures were steady on Wednesday, after briefly touching a 10-month high earlier amid concerns that the wet weather in key producer country Thailand could disrupt production.

“Thailand’s Meteorological Department warned of isolated heavy thunderstorms in the southern region from Jan 6-9, a key rubber-producing area, which continued to exert upward pressure on prices,” she told Bernama.

Crude Oil Weakness Caps Market Gains

On the global front, she said oil prices moved lower after United States President Donald Trump said the US had reached a deal to import US$2 billion worth of Venezuelan crude. The announcement raised expectations of higher crude supply to the US market, the world’s largest oil consumer, putting downward pressure on energy prices and tempering additional gains in rubber.