SICOM TSR20 Extends Two-Day Rally, 230–235 Cents Target Back in Sight
Medan, June 12, 2026 – Global natural rubber prices are showing signs of recovery after coming under pressure earlier this week. The SICOM TSR20 July 2026 contract, monitored at 7:07 a.m. WIB on Friday, was quoted at 225.2 US cents/kg, up 0.8 cent from the previous close. The gain marked the second consecutive daily increase after the same contract settled at 224.4 US cents/kg on Thursday (June 11).
The rebound is noteworthy as it comes amid mixed market fundamentals. Several market reports continue to point to seasonally weak demand, declining vehicle sales in China, and expectations of higher rubber supply from major Southeast Asian producing countries. However, the market appears to be responding to more constructive factors, including lower inventories, tighter physical supply in several producing regions, and renewed technical buying following the sharp correction seen over the past few days.
Rebound After a Sharp Correction
SICOM TSR20 price movements throughout the year continue to reflect a broadly upward trend. After starting January at 181.7 US cents/kg, the contract climbed to a high of 234.5 US cents/kg on June 2 before retreating to the 222–225 US cents/kg range.
The correction brought prices back to an important support zone that had previously served as a consolidation base during May. After touching 222.6 US cents/kg on June 10, the market began to recover, rising to 224.4 US cents/kg on June 11 and extending gains to 225.2 US cents/kg during the morning session on June 12.
From a technical perspective, this price action suggests that the market is attempting to establish a new base after the aggressive selling pressure seen since early June.
Why Did SICOM Rise Again This Morning?
This morning's advance appears to have been driven by a combination of factors rather than a single catalyst.
First, prices entered a strong technical support zone. On the daily chart, the 222–224 US cents/kg range had previously served as an accumulation area before the rally toward 234 US cents/kg. As prices returned to this region, buying interest increased significantly.
Second, early trading displayed characteristics of short covering. During the opening session, prices briefly touched 226.2 US cents/kg before easing back toward 225 US cents/kg. At the same time, open interest declined by approximately 490 lots. Rising prices accompanied by falling open interest generally indicate that traders are closing short positions rather than opening new long positions.
Third, the market has begun to reassess medium-term supply risks. Although Thailand, Vietnam, and Indonesia are currently in their peak production season, raw material prices in Thailand remain relatively firm. In addition, concerns over the potential impact of weather conditions on plantation productivity during the second half of the year have not completely faded.
Fourth, China's natural rubber inventories have shown a more encouraging trend than in previous months. The latest figures indicate that China's social inventories of natural rubber declined to approximately 126.92 million tons, nearly 2% lower than the previous week. The inventory drawdown has provided additional psychological support for the market.
Fundamentals Remain Mixed
Despite the recent recovery, several challenges continue to weigh on market sentiment.
Demand for tires in China and several other Asian countries remains seasonally weak. Operating rates at tire manufacturers in Shandong declined compared with the previous week for both truck and passenger vehicle tires. Additional pressure comes from slowing vehicle sales in China, which reportedly fell by more than 20% year-on-year.
Meanwhile, the synthetic rubber market also remains under pressure. Butadiene rubber (BR) prices have weakened alongside lower butadiene feedstock prices. This limits the upside potential for natural rubber prices, as some industrial users may partially substitute synthetic rubber when price differentials become attractive.
Consequently, although prices are recovering, the market continues to face headwinds from weak end-user demand.
Opportunity to Retest 230–235 US Cents Remains Open
From a technical standpoint, the two-day recovery suggests that selling pressure is beginning to ease.
The 224 US cents/kg level has now become an important short-term support. As long as prices remain above this level, further gains remain possible.
The next key price targets are:
226.5–227.0 US cents/kg as the initial resistance zone.
230 US cents/kg as the major psychological resistance.
233–235 US cents/kg as the next upside target if buying momentum continues to strengthen.
Conversely, if prices fall back below 224 US cents/kg, the market could retest 222 US cents/kg and potentially 220 US cents/kg.
Considering the current combination of technical and fundamental factors, the most likely scenario for the remainder of the week is another attempt to challenge the 230 US cents/kg level. Should this resistance be broken with stronger trading volume and rising open interest, the path toward 233–235 US cents/kg would become increasingly achievable.
Market Enters a Critical Turning Point
Overall, SICOM TSR20's two consecutive daily gains indicate that the market has not yet lost the medium-term bullish structure established since the beginning of the year. Although demand conditions have yet to fully recover, the combination of declining inventories, firm raw material prices, and widespread short covering has provided sufficient support for the market to rebound.
Price action over the next several trading sessions will determine whether the current recovery is merely a technical bounce following the recent correction or the beginning of a renewed attempt to revisit the early June highs above 234 US cents/kg. For now, market participants will closely watch whether prices can hold above 224 US cents/kg and successfully break through the key 230 US cents/kg resistance level in the days ahead.