SICOM SICOM TSR20 Holds Firm Above 220 US Cents/Kg as Global Rubber Prices Reach a 9-Year High
Medan, May 13, 2026 — The global natural rubber market continued to show a strong bullish trend during the second week of May 2026. Futures prices across major global exchanges strengthened once again and even touched their highest levels in several years amid tight raw material supplies, rising global energy prices, and growing demand expectations from the electric vehicle (EV) industry.
In the Singapore market, the June-delivery SICOM TSR20 contract, monitored on Wednesday morning at 7:25 WIB, stood at 222.2 US cents/kg, up 0.4 points from the previous trading session. The level further reinforced global rubber prices’ firm position above the key psychological threshold of 220 US cents/kg.
Meanwhile, in China, the most active RSS3 September contract on SHFE was recorded at 17,770 yuan/ton, slipping slightly by 55 points in morning trading. Nevertheless, overall market sentiment remained positive.
The latest rally in global rubber prices has been driven by a combination of supportive fundamental factors. In its latest market report, the Japan Exchange Group (JPX) stated that global natural rubber supplies remain tight, while speculative funds in China have aggressively increased long positions following the Labour Day holiday.
Market participants have also begun pricing in long-term demand growth from the global electric vehicle industry. Rising EV adoption is expected to support consumption of vehicle tires and other rubber-based products, particularly amid persistently high global fuel prices.
Crude oil prices, which remain elevated due to geopolitical tensions in the Middle East, have also become a catalyst for strengthening commodity markets, including natural rubber. Higher energy prices increase synthetic rubber production costs, potentially shifting part of demand toward natural rubber.
On the other hand, concerns over extreme weather linked to the strengthening El Niño phenomenon are beginning to attract serious market attention. Several commodity analysts in Asia believe that weather disruptions could hamper production in major Southeast Asian producing countries such as Thailand, Indonesia, and Vietnam.
Raw material prices in Thailand’s physical market have reportedly continued setting new records. Latex and cup lump prices in Hat Yai surged sharply due to limited supply from farmers. The situation has intensified concerns that this year’s tapping season may not run optimally.
Price movement data for SICOM TSR20 throughout the year shows a highly significant upward trend. At the beginning of January 2026, prices were still hovering around 181.7 US cents/kg. However, prices gradually climbed and briefly reached 223.3 US cents/kg on May 11, 2026, before easing slightly to 221.8 US cents/kg on May 12 trading.
As a result, since the beginning of the year through mid-May 2026, SICOM TSR20 prices have surged by around 40 US cents/kg, or more than 22 percent.
Tight Supply Becomes Main Driver
The current price rally is primarily being driven by global supply conditions that have not yet fully recovered. Natural rubber inventories in China’s bonded warehouse areas have reportedly continued to decline, reflecting strong downstream industrial demand.
Although stocks at several ports have started to increase, the market believes the additional supply is still insufficient to offset global consumption growth, particularly from the tire industry and automotive manufacturing sector.
Commodity analysts also believe that extreme weather patterns over the past few months have disrupted rubber plantation productivity in several major producing countries. Heavy rainfall in some regions and extreme heat in others have prevented latex productivity from reaching optimal levels.
In addition, persistently high global production and logistics costs have made producers cautious about increasing exports in large volumes.
Tire and EV Industry Demand Remains Solid
Amid the global economic slowdown, natural rubber demand from the automotive sector has continued to show relatively strong resilience. The tire industry remains the world’s largest consumer of natural rubber, accounting for around 70 percent of total consumption.
China, the world’s largest consumer, continues to record relatively strong tire export growth. Moreover, rising electric vehicle sales are considered one of the key drivers of natural rubber demand growth.
Several market analysts estimate that the transition toward electric vehicles will increase demand for high-quality tires with better durability and lower rolling resistance, potentially boosting consumption of premium natural rubber.
Volatility Potential Remains High
Although the short-term trend remains bullish, the market is expected to stay volatile. Market participants are beginning to monitor the possibility of increased production entering the peak tapping season in the second half of this year.
If global production begins to recover while demand slows due to the global economic slowdown, price correction pressure could re-emerge in the third or fourth quarter of 2026.
In addition, developments in global trade policies — including potential anti-dumping measures against Chinese tire products entering Europe — could also influence natural rubber demand in the coming months.
However, for now, the combination of tight supply, high energy prices, extreme weather, and optimism surrounding electric vehicle industry demand continues to provide the main foundation supporting global rubber prices within a strengthening trend.