NR market sentiment to improve in the near term: MRB
Malaysian Rubber Board (MRB) has said that the Natural Rubber (NR) market sentiment is expected to improve in the near term in line with the anticipation of global economic growth. In its June 2017 NR market review, MRB stated that the physical rubber market will continue to be influenced by rubber futures markets. However, it is pointed out that the rubber market is expected to be volatile due to uncertainty of non-fundamental factors such as crude oil prices, currencies fluctuations and economic development in major NR consuming countries.
“According to the latest World Economic Prospects by World Bank in June 2017, global economic growth is projected to accelerate to 2.7 per cent in 2017, up from a post crisis low of 2.4 per cent in 2016. It will strengthen further to 2.9 per cent in 2018- 2019. Tokyo Commodity Exchange (TOCOM) rubber futures may rise into a range of 223.10 – 236.70 yen per kg in the near term, as reflected by its wave pattern and a Fibonacci retracement analysis. Investors will be keeping their eyes on greater uncertainty on US policies which will impact the global economy,” said MRB.
According to MRB, the overall market conditions during June 2017 were influenced by instability of the regional rubber futures markets, currencies movements of the NR exporting countries against US dollar (USD) and the fluctuation of crude oil prices.
“The movement of US Dollar Index may not influence commodities prices unless it surpasses 100. Oil prices are expected to hover around an average of USD 55 per barrel in 2017 as the market players remains doubtful on the extension of output curbs by OPEC for a further nine months until end of March 2018 amid an increase in US oil production,” the report further said.