SICOM TSR20 Recovers from Selling Pressure, with 230–240 US Cents/kg Still Within Reach This Week
Medan, June 9, 2026 – The global natural rubber market is showing early signs of recovery after coming under heavy selling pressure in the previous trading session. As of 07:15 WIB (Western Indonesia Time), the July SICOM TSR20 contract on the Singapore Exchange (SGX) was trading at 225.5 US cents/kg, up 0.4 US cents from the previous close.
The modest rebound has attracted market attention because it follows Monday's sharp correction, when SICOM TSR20 fell to 225.1 US cents/kg, ending a rally that had previously lifted prices to the 234–235 US cents/kg range—the highest level of the year—in early June.
Market sentiment also improved in China. The actively traded September RSS3 contract on the Shanghai Futures Exchange (SHFE) rose 225 yuan to 17,625 yuan per tonne, suggesting that selling pressure is beginning to ease and that the market is gradually rebuilding upward momentum.
Selling Pressure Driven by Both Technical and Fundamental Factors
The sharp decline in the previous session was triggered by a combination of technical and fundamental factors.
From a technical perspective, the market experienced significant profit-taking after an extended rally that began in early May. Over the past month, SICOM TSR20 climbed from around 217 US cents/kg to the 234–235 US cents/kg range with only limited corrections, leaving the market in an overbought condition.
In China, the benchmark Shanghai rubber contract also failed to break above the key resistance level near 18,440 yuan per tonne, forming a classic double-top pattern. Once the breakout attempt failed, selling pressure accelerated, pushing prices back toward 17,500 yuan per tonne.
Fundamentally, the market has also been weighed down by expectations of increasing seasonal production across Southeast Asia. As June progresses, Thailand, Vietnam, and parts of Indonesia are entering a more active tapping season, leading to a gradual increase in raw material supplies.
Meanwhile, demand from China's tire industry remains seasonally soft. Tire manufacturers have begun slowing production, inventories of finished products have increased, and traders continue to purchase raw materials only as needed rather than engaging in large-scale restocking.
Caution over the global economic outlook has also prompted some speculative funds to reduce their exposure to commodities, including natural rubber.
Thai Raw Material Prices Begin to Recover
Despite the correction in futures markets, raw material prices in Thailand have started moving higher again.
On June 8, 2026, Thailand's RSS price rose to 95 baht/kg, field latex increased to 87 baht/kg, and cup lump climbed to 75.15 baht/kg.
The strengthening of raw material prices has helped support production costs for natural rubber producers and has become one of the factors underpinning Tuesday morning's recovery in futures prices.
Market participants view the rebound in Thai raw material prices as an important signal that downside risks may become more limited, particularly if field production does not increase too aggressively over the coming weeks.
Market Structure Still Reflects "Weak Reality, Strong Expectations"
Many analysts continue to describe the current rubber market as exhibiting a "weak reality, strong expectations" structure—characterized by weak short-term fundamentals but relatively optimistic medium-term expectations.
Fundamentally, the market is currently facing seasonal supply increases and soft near-term demand. However, concerns about potential weather-related disruptions during the second half of 2026 continue to support the medium-term bullish outlook.
The risks associated with El Niño, irregular rainfall patterns, and the threat of plant diseases across parts of Southeast Asia remain key considerations for global market participants.
At the same time, persistently high raw material production costs are expected to provide a natural floor for prices, limiting the risk of a much deeper decline.
Another Test of 230–240 US Cents/kg Remains Possible
From a technical perspective, the 223–225 US cents/kg range has become an important support zone for SICOM TSR20.
As long as prices remain above this level, the potential for a continued rebound remains intact.
Analysts expect the market to test several important resistance levels during the week:
230 US cents/kg – Initial resistance
234–235 US cents/kg – Intermediate resistance
238–240 US cents/kg – Extended upside target if buying momentum strengthens further and is supported by gains in SHFE futures and Thai raw material prices
However, if support at 223 US cents/kg fails, prices could weaken toward the 220–221 US cents/kg range before establishing a new equilibrium.
Overall, the broader market continues to exhibit a pattern of bullish consolidation. The recent correction is generally viewed as a healthy unwinding of overbought conditions rather than the beginning of a major bearish trend.
Market Focus Shifts to Weather and Chinese Demand
Over the coming days, global rubber prices are expected to remain highly sensitive to weather developments across Southeast Asia and demand conditions in China's tire industry.
If Thai raw material prices continue to strengthen and global inventory levels begin to decline, another move toward the 235–240 US cents/kg range remains achievable.
Conversely, if Southeast Asian production increases faster than expected while demand remains weak, the market is likely to continue consolidating within the 220–235 US cents/kg range until a stronger catalyst emerges.