SICOM TSR20 Remains Volatile! After an Initial Rebound, Prices Come Under Pressure Again as the Market Tests the Critical 220 US Cents/kg Level
Medan, June 10, 2026 – The global rubber market remains highly volatile. After showing signs of recovery during Tuesday's trading, SICOM TSR20 futures on the Singapore Exchange (SGX) came under renewed selling pressure in Wednesday morning's session, raising fresh questions among market participants: Is the current correction merely temporary, or does it mark the beginning of a deeper downturn?
As of 07:30 WIB (Western Indonesia Time), the July SICOM TSR20 contract was quoted at 224.3 US cents/kg, down 1.6 US cents from the previous session. Meanwhile, the most actively traded September RSS3 (RU) contract on the Shanghai Futures Exchange (SHFE) declined 105 yuan to 17,475 yuan per tonne.
The latest price action reflects an ongoing tug-of-war between bullish sentiment supported by tight global supplies and bearish pressure stemming from expectations of rising production and weaker demand from the tire industry.
Strong Rally Begins to Lose Momentum
Despite the recent pullback, SICOM TSR20 has enjoyed an impressive rally so far this year.
Prices climbed from 181.7 US cents/kg at the beginning of January to a multi-year high of 234.5 US cents/kg on June 2, 2026.
Following that rally, however, the market has entered a notable technical correction. Selling pressure has intensified over recent sessions as investors lock in profits while anticipating additional supply from major producing countries such as Thailand, Vietnam, Indonesia, and Côte d'Ivoire, all of which are entering their peak tapping season.
Global market reports indicate that natural rubber supply is expected to increase as tapping activity accelerates across Southeast Asia and West Africa. Even so, unusually hot and dry weather continues to limit plantation productivity, meaning the market has yet to face a significant oversupply threat.
Why Is SICOM TSR20 Weakening Again?
Wednesday's decline reflects a combination of technical and fundamental factors.
From a technical standpoint, the market remains in a correction phase after reaching multi-year highs. Many investors continue to secure short-term profits, allowing selling pressure to dominate trading.
At the same time, synthetic rubber futures in Shanghai have weakened sharply. Butadiene rubber (BR) prices have fallen by more than 3%, driven by lower butadiene feedstock prices and growing concerns over slowing demand from the tire manufacturing sector.
Additional pressure has emerged from downstream industries. Recent data show that utilization rates at China's semi-steel tire factories have declined to 70.43%, while inventories of finished products have begun to rise. Export demand also remains subdued amid global economic uncertainty, the European Union's anti-dumping measures, and softer consumer demand.
Meanwhile, global crude oil prices have retreated as geopolitical tensions between Iran and Israel have eased somewhat. Lower oil prices generally reduce bullish sentiment across industrial commodities, including synthetic rubber, indirectly weighing on natural rubber prices as well.
Market Fundamentals Continue to Limit the Downside
Despite the recent correction, several important fundamental factors continue to support the natural rubber market.
Raw material supplies in several major producing countries have yet to loosen significantly. Uneven rainfall and persistently high temperatures continue to disrupt tapping activities across parts of Southeast Asia. At the same time, inventories at several key Asian storage hubs remain relatively low compared with historical averages.
Earlier this year, both the Japanese and Singapore rubber markets reached multi-year highs, supported by short covering and concerns over potential global supply disruptions.
These developments suggest that the medium-term outlook for the natural rubber market remains fundamentally constructive.
Which Price Levels Will the Market Test This Week?
From a technical perspective, the 223–224 US cents/kg range has become the market's nearest support zone.
Should this area fail to hold, prices could decline toward the next major psychological support at 220 US cents/kg.
If selling pressure intensifies and 220 US cents/kg is decisively breached, the market may extend its correction toward the 215–218 US cents/kg range, representing the next significant support area.
Conversely, if selling pressure begins to ease and buyers return, a rebound toward 228–230 US cents/kg remains highly achievable. This zone represents the market's primary resistance for the week.
Should concerns over tight supplies regain prominence, prices could eventually retest the 234–240 US cents/kg range over the coming weeks.
Overall, many analysts continue to view the medium-term trend for natural rubber as broadly bullish, although short-term volatility is expected to remain elevated.
Market Enters an "Observation Mode"
The market now appears to have entered what many traders describe as an "observation mode" following the powerful rally of recent months.
Investors are assessing whether the anticipated increase in Southeast Asian production will be sufficient to ease the current tightness in global supplies.
At the same time, slowing demand from the tire industry remains a key factor limiting the market's upside potential in the near term.
Against this backdrop, SICOM TSR20 is expected to trade within a relatively wide range this week, with prices remaining highly sensitive to weather developments, production data, crude oil movements, and evolving geopolitical conditions.