Rubber Prices Rebound! SICOM TSR20 Bounces from a Two-Month Low, Can It Recover Toward 215–220 US Cents/kg?
Medan, July 3, 2026 – The global natural rubber market began showing signs of recovery on Friday after several sessions of heavy selling pressure. As of 08:17 WIB (Western Indonesia Time), the August SICOM TSR20 contract on the Singapore Exchange (SGX) was trading at 210.8 US cents/kg, up 2.0 US cents from the previous session. At the same time, the September RSS3 (RU) contract on the Shanghai Futures Exchange (SHFE) gained 115 yuan to 16,755 yuan per metric ton.
The gains across the two major Asian rubber exchanges suggest that selling pressure is beginning to ease after prices fell to their lowest levels in nearly two months. Although the recovery remains modest, the rebound indicates that buying interest is gradually returning as the market moves out of oversold territory.
Nevertheless, the market remains in the early stages of recovery. Prices have yet to fully escape downward pressure, as several fundamental factors continue to limit upside potential.
Fundamental Headwinds Remain
Over the past week, the global rubber market has faced a combination of negative fundamental drivers.
On the demand side, concerns over China's automotive sector have intensified. Domestic sales by China's leading electric vehicle manufacturer, BYD, reportedly declined by approximately 22% year-on-year in June 2026. Meanwhile, the China Passenger Car Association (CPCA) sharply revised its 2026 vehicle sales forecast, now expecting an 11% decline, compared with its previous projection of only a 1% decline.
The weaker automotive outlook has raised concerns about tire demand, given that China remains the world's largest consumer of natural rubber. Slowing vehicle production could reduce raw material consumption by tire manufacturers in the coming months.
On the supply side, however, conditions have improved. Rubber production has begun increasing across Thailand, Indonesia, and Vietnam as the region enters its seasonal peak production period. More favorable weather has boosted latex yields and tapping activity, improving expectations for global supply.
Additional pressure has come from the energy market. Crude oil prices have continued to decline for a third consecutive session following signs of progress in indirect negotiations between Iran and the United States regarding shipping security through the Strait of Hormuz. Lower oil prices improve the competitiveness of petroleum-based synthetic rubber, weighing on natural rubber prices.
The Market Is Beginning to Find Balance
Despite the ongoing fundamental challenges, selling momentum appears to be weakening.
After plunging from 234.5 US cents/kg in early June to around 208–209 US cents/kg, prices have started to rebound. Friday morning's gains were also accompanied by strength in SHFE rubber futures, suggesting that buying interest is returning not only in Singapore but also in China.
Historically, the 208–210 US cents/kg range has represented an important support area. Similar price levels previously attracted buying interest during the correction seen in April.
Furthermore, following a decline of nearly 11% from the early June peak, several momentum indicators are believed to have entered oversold territory, increasing the probability of a technical rebound.
Technical Analysis: Early Signs of Recovery, but Confirmation Is Still Needed
From a technical perspective, market conditions have begun to improve compared with previous trading sessions.
Recent price action suggests that selling pressure is gradually subsiding. The rebound from the 208–210 US cents/kg area indicates that buyers are defending an important support zone.
However, the short-term trend cannot yet be considered bullish, as prices remain below several short- and medium-term moving averages. In other words, the current rebound still requires further confirmation.
The key technical levels to watch for the remainder of the week are:
Support
209–210 US cents/kg
205–206 US cents/kg (major support)
Resistance
212–214 US cents/kg
215–216 US cents/kg
218–220 US cents/kg
If prices can hold above 210 US cents/kg and break through the 212–214 US cents/kg resistance zone with stronger trading volume, the market could extend its recovery toward the 215–220 US cents/kg range.
Conversely, a move back below 209 US cents/kg could expose prices to another test of the 205–206 US cents/kg support area.
Medium-Term Fundamentals Still Require Close Monitoring
Beyond the current short-term sentiment, several medium-term fundamental factors continue to deserve attention.
Although rubber production across Southeast Asia is increasing as the seasonal harvesting period progresses, weather conditions during the second half of the year could still affect production levels. At the same time, the pace of demand recovery will largely depend on improvements in the global automotive industry, particularly in China.
Meanwhile, geopolitical developments, crude oil prices, and China's economic policies are expected to remain the primary drivers of market direction over the coming weeks.
Conclusion
The global natural rubber market is beginning to display signs of a technical rebound following a sharp sell-off over the past week. The recovery of SICOM TSR20 to 210.8 US cents/kg, together with the rise in SHFE RSS3 futures to 16,755 yuan per metric ton, suggests that buying interest is gradually returning near an important support zone.
Nevertheless, the recovery remains in its early stages. Short-term fundamentals continue to be challenged by increasing supply from Southeast Asia, weaker prospects for China's automotive sector, and lower crude oil prices. Until prices successfully break above the 212–216 US cents/kg resistance zone, market participants should remain cautious about continued volatility and the possibility of renewed profit-taking.
Disclaimer: The technical analysis presented above represents an interpretation based on current chart patterns, technical indicators, and fundamental developments available as of July 3, 2026. Commodity prices are influenced by numerous factors that may change at any time. Accordingly, this analysis should not be interpreted as a recommendation to buy or sell futures contracts.