Global Rubber Prices Remain Under Pressure as Market Watches SICOM TSR20 Test Key Support Amid Seasonal Supply Surge

Medan, May 22, 2026 — Global natural rubber prices remained under pressure heading into the weekend as expectations of increasing supply from major Southeast Asian producing countries continued to outweigh a recovery in industrial demand.

As of 7:00 a.m. WIB on Friday (May 22), the most actively traded rubber contract on the Shanghai Futures Exchange (SHFE) fell to around 17,310 yuan per ton, down approximately 1.17%. Meanwhile, the SICOM TSR20 June contract on the Singapore Exchange (SGX) also declined to 220 US cents/kg.

Market participants attributed the latest weakness primarily to the normalization of tapping activities in Thailand, Indonesia, Vietnam, and China, following earlier disruptions caused by adverse weather conditions and the dry season.

The second quarter is traditionally regarded as the peak production period for natural rubber. With weather conditions improving across major producing regions, raw material supplies are expected to increase over the coming weeks.

Nevertheless, the market has not yet entered a fully bearish phase, as relatively tight inventories and stable demand from the tire industry continue to provide underlying support.

Supply Increases While Demand Remains Soft

According to several Chinese commodity analysts, the imbalance between supply and demand has become increasingly evident.

Global supply is expected to rise as the tapping season progresses, while downstream demand remains relatively flat. Although the tire manufacturing sector—the largest consumer of natural rubber—continues to operate at relatively high utilization rates, raw material purchases remain largely limited to routine production needs rather than aggressive inventory building.

Recent data indicate that operating rates at semi-steel tire plants in China remain above 75%, while full-steel tire manufacturers continue operating within the relatively high range of 67%–80%.

Despite robust tire production, demand from the logistics and transportation sectors has yet to recover fully. Freight volumes remain below expectations, transportation rates have softened, and demand for new commercial vehicles continues to be limited.

As a result, tire manufacturers have shown little urgency to engage in large-scale restocking.

Inventories Remain Relatively Well Controlled

On the other hand, China's rubber inventories continue to act as an important stabilizing factor for the market.

Natural rubber inventories in Qingdao stood at approximately 718,700 tons as of May 10, 2026, representing only a modest increase from the previous week. However, nationwide social inventories of natural rubber in China declined to around 1.316 million tons by mid-May.

The decline in national inventories is one reason why many analysts believe downside price potential may be becoming increasingly limited.

In addition, raw material prices in Thailand and southern China have remained relatively stable, reducing the likelihood of aggressive selling pressure from producers.

Long-Term Trend Remains Positive

Despite the recent correction, natural rubber prices have continued to perform strongly throughout 2026.

SICOM TSR20 data show that prices began the year at approximately 181.7 US cents/kg in early January before rallying above 231 US cents/kg by mid-May.

The current pullback is widely viewed as a consolidation phase following several months of strong gains rather than the beginning of a broader downtrend.

Market participants are also closely monitoring weather developments across Southeast Asia, global crude oil prices, movements in the Chinese yuan, and demand trends within China's automotive and logistics industries.

Market Focus Shifts to SICOM TSR20

For the remainder of the week, market attention is expected to center on the SICOM TSR20 contract, which is currently trading around 220 US cents/kg after retreating from its mid-May highs.

Should selling pressure continue as seasonal supply expands and demand catalysts remain limited, the market could test strong support in the 218–219 US cents/kg range. A decisive break below this level could pave the way for a decline toward the psychologically important 215 US cents/kg mark.

Conversely, renewed bargain hunting or weather-related disruptions affecting rubber tapping in producing countries could trigger a technical rebound toward the 223–225 US cents/kg range before the end of the trading week.

From both a technical and fundamental standpoint, the SICOM TSR20 market remains in a consolidation phase with a sideways-to-bearish bias, while investors await clearer signals from Southeast Asian supply developments and demand trends within China's tire industry.