Is the Rally Still Intact? SICOM TSR20 Holds Above 228 US Cents/kg as Market Eyes a Fresh Attempt at the 230-Cent Level
Medan, June 18, 2026 – Global natural rubber prices remained resilient in Thursday morning trading despite signs of profit-taking after an extended rally that had pushed prices to their highest levels in several months.
As of 06:53 WIB (Western Indonesia Time), the July 2026 SICOM TSR20 contract on the Singapore Exchange (SGX) was trading at 228.7 US cents/kg, up 0.5 US cents from the previous close of 228.2 US cents/kg. Meanwhile, the most actively traded rubber futures contract on the Shanghai Futures Exchange (SHFE), RU2609, declined 185 yuan, or approximately 1.03%, to 17,840 yuan per tonne.
The contrasting performance between the Singapore and Shanghai markets suggests that bullish sentiment in the natural rubber market remains intact, although traders are becoming increasingly cautious following the strong price rally since the beginning of the year.
Historical data show that SICOM TSR20 has climbed from 181.7 US cents/kg in early January to 228.7 US cents/kg, representing a gain of nearly 26% year to date. The performance has made natural rubber one of the strongest-performing agricultural commodities during the first half of 2026.
Shanghai's Pullback Viewed as a Healthy Correction
Despite the decline in Shanghai, the latest weakness is widely viewed as a normal correction following an extended rally.
Since early April, SHFE rubber futures had risen from around 16,000 yuan per tonne to nearly 18,500 yuan per tonne before coming under selling pressure in recent sessions.
Profit-taking has been one of the main factors weighing on the market. Many investors have chosen to reduce long positions after prices approached multi-month highs. At the same time, traders are beginning to factor in the arrival of Southeast Asia's traditional peak production season, which typically begins around the middle of the year.
During this period, natural rubber output in Thailand, Vietnam, Malaysia, and parts of Indonesia generally increases, raising expectations of greater supply compared with previous months.
Thai Weather Continues to Support Prices
Despite concerns over seasonal production growth, weather conditions continue to provide support for the market.
Persistent rainfall in southern Thailand is still disrupting tapping activities, preventing raw material supplies from fully recovering.
Thailand's cup lump prices remain around 73 baht/kg, reflecting relatively tight raw material availability. In addition, data from the Association of Natural Rubber Producing Countries (ANRPC) indicate that member countries' production during the first four months of 2026 remained below the corresponding period last year.
Indonesia's rubber exports also continue to lag behind year-earlier levels, while some market participants are increasingly considering the possibility of El Niño conditions developing during the second half of the year, which could affect production across several major producing countries.
Demand Continues to Offer Support
On the demand side, the market continues to receive positive signals from the tire manufacturing sector.
Truck tire factories in China are operating at approximately 67% capacity, while passenger car tire plants remain above 71% utilization.
Heavy-duty truck sales in China have also remained robust. Between January and May 2026, sales reached approximately 544,000 units, an increase of more than 23% compared with the same period last year.
Meanwhile, Chinese customs data show that imports of natural and synthetic rubber in May 2026 fell 12.5% year-on-year, helping to maintain market balance despite the seasonal increase in production.
The Market Is Searching for a New Equilibrium
As the second half of June begins, the global rubber market is entering an important transitional phase.
On one hand, supply is expected to increase as the seasonal harvesting period progresses. On the other hand, unfavorable weather, declining inventories in several key locations, and relatively healthy demand from the tire industry continue to limit downward price pressure.
Market attention is now focused on the 230 US cents/kg level, which has become a key psychological resistance after prices have repeatedly tested this area in recent weeks.
If TSR20 can break above and sustain trading beyond 230 US cents/kg, the next upside target would likely be around 233 US cents/kg. Should bullish sentiment strengthen further, prices could even revisit the early June peak near 237.6 US cents/kg.
Conversely, if profit-taking intensifies, prices could retreat toward the 227–225 US cents/kg range. Even so, this area is currently viewed as a solid support zone, as it aligns closely with the market's average trading range over recent weeks.
Looking ahead, market direction will largely depend on weather developments across the major producing countries and on whether global demand can absorb the additional supply expected from Southeast Asia's production season. For now, despite the correction in Shanghai, SICOM TSR20 continues to demonstrate notable resilience, and the possibility of another test of the 230 US cents/kg level remains firmly on the table.