Bullish Momentum Continues as SICOM TSR20 Eyes a Test of 240 US Cents/kg This Week
Medan, June 3, 2026 – The global natural rubber market extended its strong rally this week, with the July SICOM TSR20 contract on the Singapore Exchange (SGX) rising to 235.1 US cents/kg during Wednesday morning trading at 07:23 WIB (Western Indonesia Time), up approximately 0.6 US cents from the previous session.
The latest gain extends the bullish trend that has been in place since late May, bringing prices closer to their highest psychological levels in several years.
The aggressive price advance has been supported by a combination of strong fundamental factors, including supply concerns across Southeast Asia, declining global inventories, extreme weather conditions, and increasing speculative activity on the Shanghai and Osaka rubber exchanges.
Year-to-date data show that SICOM TSR20 has maintained a remarkably consistent upward trend throughout 2026. Prices have climbed from around 181.7 US cents/kg at the beginning of January to 234.5 US cents/kg on June 2, 2026, representing a gain of more than 29% since the start of the year. The strongest rally has occurred since mid-April, when the market began focusing on the potential impact of El Niño and declining rubber exports from Thailand.
Global Market Focuses on Supply Risks in Thailand and Indonesia
International market participants are closely monitoring weather conditions in the world's two largest natural rubber producers—Thailand and Indonesia.
Thailand's Meteorological Department has issued warnings of heavy rainfall across the country's southern region between June 2 and June 7, raising concerns that tapping operations and raw material transportation could be disrupted.
Indonesia, meanwhile, is facing the opposite challenge, with below-normal rainfall expected during June, increasing the risk of an early dry season.
The combination of these two extreme weather patterns has reinforced market concerns over short- to medium-term supply availability.
Analysts reported that rubber futures on the Osaka Exchange (OSE) recently reached their highest level in two weeks, while rubber futures on the Shanghai Futures Exchange (SHFE) climbed to their strongest levels since mid-May.
Additional support has come from improving global electric vehicle sales, particularly in China, where leading EV manufacturer BYD has returned to sales growth after several months of slower performance.
Declining Inventories Make the Market More Sensitive
Inventory data have also continued to provide strong support for prices.
Natural rubber inventories in Qingdao, China, declined again on a weekly basis, with the largest reduction occurring in bonded warehouses, where stocks fell by more than 10%.
The continued inventory drawdown suggests that underlying physical demand remains healthy and that supply constraints have yet to be fully resolved.
Industry participants also note that import costs remain elevated due to the backwardation structure between domestic and international markets.
Several Chinese analysts believe that the current tight supply environment is unlikely to ease in the near term, suggesting that prices are likely to remain firm despite continued volatility.
SICOM TSR20 Could Test 238–240 US Cents/kg This Week
From a technical perspective, the uptrend in SICOM TSR20 remains exceptionally strong.
After successfully breaking above the 228–230 US cents/kg resistance zone at the end of May, the market has entered a phase of bullish acceleration.
If buying momentum remains intact, the 238–240 US cents/kg range is expected to become the next upside target this week.
This zone represents an important psychological resistance level, marking the highest price area seen in more than a decade.
However, should speculative funds begin taking profits aggressively, a healthy correction could see prices retest support around 228–230 US cents/kg before resuming the broader uptrend.
Technically, the daily chart continues to display a clear pattern of higher highs and higher lows, while rising trading volume alongside higher prices indicates that the uptrend remains well supported.
Fundamentals Continue to Favor the Bulls
From a fundamental standpoint, the market continues to receive support from several key factors:
The threat of El Niño affecting plantation productivity across Southeast Asia;
Heavy rainfall disrupting rubber production in Thailand;
Concerns over dry weather in Indonesia;
Declining inventories in Qingdao;
Strong speculative buying activity on SHFE and the Shanghai International Energy Exchange (INE);
Persistently high raw material prices in Thailand, Yunnan, and Hainan;
Declining Thai rubber exports to China; and
Positive sentiment from the global automotive and electric vehicle sectors.
Nevertheless, the market continues to face headwinds from global tire demand. Several Chinese tire manufacturers are reportedly entering their seasonal slowdown, with domestic orders yet to fully recover.
As a result, analysts believe the current rally could begin to lose momentum if prices fail to establish a convincing break above the 240 US cents/kg level.
Market Expected to Remain Volatile
In the near term, market volatility is expected to remain elevated as traders weigh expectations of higher seasonal production against concerns over prolonged weather-related supply disruptions.
However, as long as global inventories continue to decline and rubber supplies across Southeast Asia remain constrained, most analysts maintain a bullish outlook for the natural rubber market.
For the remainder of this week, market participants will focus on whether SICOM TSR20 can hold above 235 US cents/kg and extend its rally toward 240 US cents/kg, or whether the market will undergo another round of profit-taking following its exceptionally rapid advance over the past two weeks.