RHB has reiterated its ‘underweight’ stance on the rubber products sector, citing ongoing challenges in the operating environment. The sector faces a prolonged period of inventory consolidation, coupled with fierce competition from Chinese manufacturers in non-US markets. Additionally, the upcoming commissioning of new plants in Indonesia and Vietnam is expected to further threaten Malaysia’s rubber product sales to the US by November 2025.
The report, titled “A Steep Slope To Climb; Still UNDERWEIGHT,” highlights the bleak prospects for the sector. Analysts at RHB, including Oong Chun Sung, emphasise that the competitive pricing strategies adopted by Chinese manufacturers are exacerbating the difficulties faced by the industry.
The anticipated new plants in Indonesia and Vietnam are poised to increase competition, potentially impacting Malaysia’s market share in the US. This development is expected to unfold as early as November 2025, adding pressure to an already strained sector.
RHB’s analysis underscores the challenges that the rubber products industry must navigate in the coming months. The combination of inventory issues and heightened competition presents a significant hurdle for companies operating within this space.
Looking ahead, the sector’s ability to adapt to these challenges will be crucial. The commissioning of new plants in neighbouring countries could reshape market dynamics, necessitating strategic adjustments from industry players. As the landscape evolves, stakeholders will need to closely monitor these developments to mitigate potential impacts on their operations.
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