Rubber Prices Prepare to Test the 225 Level, Market Rebound Seen Growing More Solid
Medan, May 8, 2026 — The global natural rubber market continues to strengthen, with TSR20 and RSS3 prices holding near their highest levels in the past nine years. A combination of technical and fundamental factors is increasingly seen as forming a more solid rebound, as market confidence grows over the potential for tighter global supply in the second quarter of 2026.
During morning trading at 07:36 WIB, the June SICOM-TSR20 contract on the SGX rose to US 223.7 cents/kg, up 1.1 points. Meanwhile, the active September RSS3 contract on the SHFE stood at 18,020 yuan per ton, gaining 135 yuan.
The rally extended the upward trend that has been underway since early April 2026. Trading data showed TSR20 climbing from 201.5 cents/kg on April 2 to 222.6 cents/kg on May 7, 2026, marking an increase of more than 10 percent within roughly one month of trading.
Market Begins Targeting the 225-Cent Area
Technically, the price structure is considered to be entering a bullish continuation phase after successfully breaking through the psychological resistance level of 220 cents/kg. The formation of higher highs and higher lows continues to indicate strong buying momentum.
Market participants are now closely watching the 225 cents/kg area as the next testing level. The zone is viewed as an important psychological resistance following the breakout from a long consolidation phase that had persisted for several years.
If the market can maintain levels above 220–222 cents/kg over the coming trading sessions, the opportunity for further gains toward the 228–230 cents/kg range is expected to become increasingly open. However, in the event of a correction, short-term support is projected around 217–218 cents/kg and 212–213 cents/kg.
Analysts noted that the current rally has a different character compared with the gains seen in the first quarter of 2026. Previously, price increases were driven mainly by dry weather expectations and El Niño sentiment. The current strengthening is now accompanied by indications of improving physical market structure and reduced short-position pressure.
Global Supply Remains the Main Driver
Fundamentally, market attention remains focused on the potential acceleration of global inventory reduction, particularly in China.
Research institutions in China stated that May 2026 could mark the beginning of a more visible de-stocking phase. One of the triggers is China’s zero-tariff policy for 33 African countries, which notably excludes natural rubber from the list of duty-free commodities.
This condition is expected to reduce the inflow of African rubber into the Chinese market and accelerate domestic inventory absorption. The market has started to view this as a bullish factor that had not been fully priced in previously.
Recent data showed that China’s social stocks of dark rubber remain around 920,000 tons, while light rubber inventories are estimated at approximately 413,000 tons. Although dark rubber stocks still increased slightly on a weekly basis, the market has begun to pay closer attention to slowing imports and declining exports from several key producing countries.
Weather and Production Closely Monitored
Beyond inventory factors, Southeast Asian weather conditions have again become a market focus. Thailand’s meteorological agency issued warnings of storms and heavy rainfall from May 7–12 across several major rubber-producing regions.
Although the impact on production is currently considered limited, as some areas are only entering the early tapping season, the market still sees risks of disruptions to latex collection activities and raw material distribution.
The market is also monitoring the development of El Niño, which is projected to become one of the strongest in the past decade. Prolonged drought and uneven rainfall distribution are still considered capable of pressuring productivity in the coming semesters.
Raw material prices at the producer level also remain elevated. Firm Thai cup lump prices are viewed as an indication that the physical market has not yet fully loosened. In global trading, cup lump is often regarded as a key benchmark for natural rubber market strength.
On the other hand, production has started to increase gradually. Tapping activity in Hainan was reported at around 3,000 tons per day, while northern and northeastern Thailand are expected to increase tapping operations by mid-May. Southern Thailand is projected to enter its active tapping phase only at the end of May.
However, the market has yet to see sufficient additional supply capable of significantly pressuring prices.
Demand Remains Stable Despite Weakness
On the demand side, China’s tire industry continues to face pressure from low profit margins and export challenges arising from international trade policies, including anti-dumping threats from the European Union.
Nevertheless, post-May Day operational rates at tire factories remain better than the historical average of recent years, indicating that demand is still relatively resilient and has not weakened sharply.
In contrast to the tire industry, the latex glove sector has shown signs of weakness. Several factories in China were reportedly operating at only 40–60 percent capacity, while some have begun reducing production loads or temporarily suspending operations.
Outlook: Market Awaits De-stocking Confirmation
Analysts believe the market’s next direction will largely depend on confirmation of declining global inventories during May and June 2026.
If de-stocking genuinely begins to materialize and new supply does not increase too rapidly, TSR20 prices could continue strengthening toward the 225–230 cents/kg range in the medium term.
However, if new-season production rises faster than expected and inventories fail to decline significantly, the market may return to a consolidative movement following the sharp rally seen in recent weeks.