Rubber Prices Poised for a Rebound? Markets Begin to Recover, but Correction Risks Still Linger
Medan, June 30, 2026. The global natural rubber market is beginning to show signs of recovery following the sharp sell-off seen last week. As of 09:23 WIB (Western Indonesia Time), the July SICOM TSR20 contract on the Singapore Exchange (SGX) was trading at US 213.2 cents/kg, up 1.3 cents, while the September RSS3 contract on the Shanghai Futures Exchange (SHFE) gained 180 yuan to 16,705 yuan/tonne. The gains in these two major futures markets suggest that extreme selling pressure is beginning to ease, although investors remain cautious.
The rebound comes amid a mix of supportive and limiting factors. On the external front, crude oil prices have strengthened again amid escalating tensions in the Middle East and disruptions to shipping through the Strait of Hormuz. Higher oil prices generally support natural rubber prices by increasing the production costs of synthetic rubber, a key substitute.
Meanwhile, the Japanese yen has weakened to its lowest level in nearly four decades, improving the competitiveness of rubber futures traded in Osaka and further supporting market sentiment.
Nevertheless, headwinds remain. Rubber production in Thailand, Indonesia, and Vietnam has begun to recover following the end of the wintering season. The increase in supply has made market participants reluctant to push prices significantly higher over the short term.
Tire Industry Continues to Support Demand
On the downstream side, the global tire industry continues to provide fundamental support for natural rubber consumption. Between March and June 2026, more than 80 tire manufacturers in China, along with several global producers, raised product prices by 2–6 percent. The increases were largely driven by rising raw material costs, including natural rubber, synthetic rubber, and carbon black.
However, market conditions remain less than ideal. End-user demand is still relatively weak, prompting many distributors to accept thinner profit margins rather than risk losing customers. In other words, higher tire prices primarily reflect efforts by manufacturers to preserve profitability rather than a significant improvement in underlying demand.
Fundamentals Remain Constructive
In its latest market outlook, the Association of Natural Rubber Producing Countries (ANRPC) continues to maintain a "cautiously positive" outlook for the natural rubber market in 2026.
ANRPC expects global rubber consumption to grow by approximately 1.3 percent, supported by:
expanding electric vehicle (EV) production;
rising automotive manufacturing in China and India;
continued tire demand from emerging markets; and
lower European Union anti-dumping duties on certain Chinese tire products.
At the same time, several downside risks remain, including uncertainty in global trade, ongoing geopolitical tensions, and the possibility of slower global economic growth.
Technical Analysis: Recovery Begins, but Confirmation Is Still Needed
From a technical perspective, market conditions have improved noticeably compared with recent trading sessions.
Prices have rebounded from the recent low of around US 204.1 cents/kg to approximately 213 cents/kg. This recovery is meaningful because it follows an aggressive sell-off that pushed the Relative Strength Index (RSI) into oversold territory.
Several technical indicators have also started to improve:
RSI has begun rising from oversold levels, indicating that selling pressure is easing.
Trading volume remains relatively healthy, suggesting that the rebound is supported by active market participation.
Open Interest (OI) in the July contract continues to decline as the contract approaches expiration, indicating that traders are closing or rolling positions into later contracts.
The September contract has now become the main contract with the largest Open Interest, making it a more representative indicator of overall market sentiment.
Nevertheless, prices remain below the MA5, MA10, MA20, and MA40 moving averages, indicating that the short-term trend has not yet fully turned bullish.
Is the Rebound Strong Enough?
The answer is the rebound is gaining momentum, but confirmation of a sustained uptrend is still required.
Only a few days ago, every upward move was quickly met by heavy selling pressure. Market conditions have since improved. Price gains are now being accompanied by stronger RSS3 futures in Shanghai, firmer crude oil prices, and renewed buying interest in the most actively traded contracts.
Even so, unless prices successfully break above the 214–216 US cents/kg resistance zone and remain above key short-term moving averages, the market may still face profit-taking pressure.
Factors That Could Extend the Rally
Several developments could support a continued rebound:
persistently high crude oil prices;
renewed geopolitical disruptions affecting global energy supply;
sustained demand from the tire industry;
weather-related supply disruptions in Southeast Asia; and
renewed buying interest in the actively traded September contract.
Factors That Could Renew Bearish Pressure
Conversely, selling pressure could return if:
rubber production in Thailand, Indonesia, and Vietnam increases faster than expected;
crude oil prices decline sharply;
China's economic data disappoints;
a stronger US dollar weighs on commodity prices; or
profit-taking resumes following the recent rebound.
Market Outlook for This Week (Technical Analysis – Not Investment Advice)
Based on the current chart structure, the most likely trading range over the coming sessions is:
First support: 210–211 US cents/kg
Major support: 204–206 US cents/kg
First resistance: 214–216 US cents/kg
Next resistance: 218–220 US cents/kg
If prices break convincingly above 214–216 US cents/kg, supported by stronger trading volume and continued strength in the September contract, the market could extend its advance toward 218–220 US cents/kg.
On the other hand, if prices fall back below 210 US cents/kg, the risk of retesting the 204 US cents/kg support area will remain.
Conclusion
Overall, the natural rubber market is displaying increasingly encouraging signs of a technical rebound compared with previous trading sessions. Selling pressure has eased, the RSI has recovered from oversold territory, and external factors—including firmer crude oil prices and stronger RSS3 futures—have provided additional support.
However, the market has not yet fully emerged from its corrective phase. Until prices break above key resistance levels and reclaim major moving averages, investors should remain cautious of continued volatility and the possibility of short-term profit-taking.
Disclaimer: The analysis above represents an interpretation based on current market developments, technical indicators, and available fundamental information. Commodity prices are influenced by numerous factors that may change at any time. Accordingly, this analysis should not be considered a recommendation to buy or sell futures contracts.