Global Rubber Prices Remain Under Pressure as New Supply Wave Begins to Weigh on the Market
Medan, July 8, 2026 – Global rubber prices remained under pressure in Wednesday's trading session despite showing signs of recovery over the previous two trading days. The August SICOM-TSR20 contract traded on SGX was quoted at US 216.7 cents per kilogram, down slightly by 0.1 cent from the previous session's level of around 216.8 cents per kilogram as of 11:05 WIB.
Meanwhile, the active September RSS3 contract on SHFE continued to post gains, rising by 45 yuan to 17,850 yuan per tonne. The divergence between the two benchmarks suggests that market participants remain cautious while assessing the direction of the next price movement.
After experiencing significant pressure in late June and touching the lowest levels seen in several months, the rubber market has now entered a consolidation phase. Prices have managed to stay above the psychological level of 210 US cents per kilogram, but attempts to return to the highs seen in early June continue to face challenges from underlying market fundamentals.
Seasonal Supply Begins Entering the Market
The main concern for market participants at present is the gradual increase in supply from major producing countries.
Thailand, the world's largest natural rubber producer, has entered its peak tapping season, with output expected to continue increasing over the coming months. Improved weather conditions across many producing regions have also supported a return to normal tapping activities after disruptions caused by heavy rainfall earlier in the year.
Indonesia, meanwhile, continues to face structural challenges stemming from aging rubber trees and labor shortages in the smallholder sector. These factors are limiting production growth compared with other producing countries.
Production in Vietnam remains relatively stable, although part of the country's output is increasingly being absorbed by the expansion of its domestic tire industry, reducing the room for export growth compared with previous years.
An interesting development is emerging from Africa. Recent data indicate that natural rubber exports from Côte d'Ivoire reached approximately 904,000 tonnes during the first half of 2026, up 0.8 percent from the same period last year. More notably, exports in June alone increased by more than 30 percent compared with the previous month.
This trend suggests that Africa's contribution to global rubber supply is becoming increasingly significant and may gradually influence the global pricing structure that has historically been dominated by Southeast Asia.
Tire Demand Has Yet to Recover
While supply conditions are improving, the demand side continues to show signs of weakness.
Chinese tire manufacturers are reportedly facing weaker new orders and rising inventories of finished products. Several factories have already begun temporary maintenance shutdowns since early July, directly reducing near-term consumption of natural rubber.
Additional pressure comes from international trade policies after the European Union officially imposed anti-dumping duties on certain Chinese tire products. The measures are expected to reduce the competitiveness of Chinese tire exports to Europe and could negatively affect natural rubber consumption in the coming months.
Nevertheless, growing adoption of electric vehicles and the expansion of the new-energy commercial vehicle segment continue to provide support for certain categories of tire demand, suggesting that the decline in overall demand may not be as severe as some market participants fear.
Weak Yen and Firm Oil Prices Offer Support
The market is still receiving support from external factors. The weakness of the Japanese yen against the US dollar has made Japanese rubber contracts more attractive to international buyers.
In addition, firm crude oil prices continue to support the competitiveness of natural rubber relative to synthetic rubber, providing an additional cushion for prices.
Prices Expected to Remain Range-Bound
Based on current market developments, rubber prices are expected to remain in a sideways trading pattern with a slightly bearish bias in the near term.
Seasonal supply growth is likely to continue weighing on prices, while weather risks, production costs, and the technical rebound following the sharp correction in late June continue to provide support.
Unless a significant new market catalyst emerges, TSR20 prices are expected to trade within a range of 214 to 219 US cents per kilogram in the short term.
Outlook for This Week
Based on price movements so far this year, the 210–212 US cents per kilogram range has become an important price floor that has successfully absorbed selling pressure over the past two weeks.
On the upside, the market is expected to encounter stronger resistance around 219–222 US cents per kilogram before any attempt to move toward the 225–228 US cents per kilogram range, which was last seen in early June.
Conversely, if supply pressure intensifies and tire demand continues to weaken, prices could once again drift toward the 212–214 US cents per kilogram range in the coming days.
It should be noted that technical analysis projections involve a high degree of uncertainty and should not be used as the sole basis for business or trading decisions.
Overall, the global rubber market is currently undergoing a consolidation phase following the sharp price adjustment that occurred in late June. Unless significant weather disruptions emerge in major producing countries or a meaningful recovery in global tire demand takes place, rubber prices are expected to remain range-bound with relatively high volatility.
For rubber industry participants in North Sumatra, current market conditions suggest that prices still possess sufficient support to remain above the levels seen at the beginning of the year, although room for substantial short-term gains appears limited.