Rubber Prices Plunge! SICOM TSR20 Falls to the 207-Cent Range as Panic Selling Sweeps the Market
Medan, June 26, 2026 – The global natural rubber market came under intense selling pressure on Thursday (June 25), as rubber futures across Asia's major exchanges posted sharp losses. The decline was driven by a combination of macroeconomic concerns, improving supply prospects, and widespread liquidation by market participants.
As of 08:53 WIB (Western Indonesia Time), the July SICOM TSR20 contract on the Singapore Exchange (SGX) had fallen to 207.5 US cents/kg, down 3.3 cents from the previous session. In China, the actively traded September RSS3 (RU) contract on the Shanghai Futures Exchange (SHFE) dropped to 16,580 yuan/tonne, a decline of 395 yuan, or approximately 2.3%.
The latest losses extended the market's downward trend over the past several days. Historical SICOM TSR20 data show that settlement prices fell from 231.6 US cents/kg on June 16 to 210.8 US cents/kg on June 25, representing a decline of roughly 9% in just seven trading sessions. Based on the intraday price of 207.5 US cents/kg, the correction had approached 10.5% from the mid-June peak.
Three Major Factors Behind the Sell-Off
The latest downturn was not triggered by a single event but by the convergence of several negative market drivers.
The first was the global macroeconomic environment. A stronger US dollar reduced the appeal of commodity-linked assets for investors. At the same time, crude oil prices weakened, prompting broad-based position reductions across commodity markets, including natural rubber. Reuters also reported that the stronger US dollar and increasing rubber supplies from Thailand were among the key factors weighing on rubber prices in Japan and across Asia.
The second factor came from the supply side. As the year enters its mid-point, major producing countries—including Thailand, Vietnam, and parts of Indonesia—have begun their higher production season. Increased raw material availability has eased concerns over supply shortages. Market reports also indicate rising shipments of Thai rubber to China, while the Association of Natural Rubber Producing Countries (ANRPC) forecasts global natural rubber production to increase by approximately 2.4% in 2026, reinforcing expectations of a more balanced—or even surplus—market.
Meanwhile, demand from the tire industry has yet to show a strong recovery. Tire manufacturers in China continue to operate at relatively modest levels following maintenance shutdowns, while raw material purchases remain focused on short-term production requirements. As a result, higher supply has not been matched by stronger consumption.
Panic Selling Accelerated the Decline
Beyond fundamental factors, recent trading patterns strongly suggest that panic selling played a significant role in accelerating the market's decline.
Many traders who had accumulated long positions in the 225–233 US cents/kg range began liquidating their holdings after prices broke below the key technical support near 220 US cents/kg. The breach triggered automatic stop-loss orders, intensifying selling pressure.
Such behavior is common in futures markets, where sharp price declines are often amplified by simultaneous position liquidation. Consequently, the pace of the sell-off has exceeded what would normally be expected based solely on changes in market fundamentals.
Technical Analysis: Oversold, but No Clear Reversal Yet
The latest price charts indicate that momentum indicators have entered oversold territory, while prices are trading well below key short-term moving averages.
This suggests that selling pressure has become excessive from a technical standpoint. However, technical indicators have yet to generate convincing reversal signals. In other words, although prices appear technically inexpensive, buyers have not yet demonstrated sufficient strength to regain control of the market.
Market conditions like these often lead to one of two outcomes: a short-term technical rebound or continued weakness before a more durable price floor is established.
Outlook Through the End of the Week
Should selling pressure begin to ease on Friday, the likelihood of a technical rebound will increase, given that the market has already entered oversold territory. However, if negative global sentiment continues to dominate and institutional investors remain on the sidelines, prices could test lower support levels.
From a technical perspective, the 205–208 US cents/kg range has now become a critical support zone. If this area holds, prices could rebound toward 211–215 US cents/kg before the end of the week.
Conversely, if selling pressure intensifies and the 205 US cents/kg level is decisively broken, the market could decline further toward 200–203 US cents/kg, which represents both an important psychological threshold and the next major support area.
Given the market's oversold condition, the most likely scenario for the remainder of the week is consolidation within the 205–212 US cents/kg range, accompanied by elevated volatility. A short-term rebound remains possible, but unless prices recover above 220 US cents/kg, the short-term trend is expected to remain bearish.