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NR market sentiment to improve in the near term: MRB

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.

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