Rubber Prices Extend Losses Ahead of Weekend as SICOM August Falls to 214.8 Cents Amid Supply Pressure and Weak Demand

Medan, July 17, 2026 – The global rubber market continued to weaken on Friday morning as selling pressure that began a day earlier persisted. The August SICOM-TSR20 contract on the Singapore Exchange (SGX) was recorded at 214.8 US cents per kilogram as of 10:30 WIB, extending losses from Thursday's close of 216.0 US cents/kg.

The decline marked a second consecutive day of losses after prices had previously reached 218.7 US cents/kg on July 15, which represented the highest level in more than a week.

Meanwhile, the active RSS3 contract in Asian markets also came under pressure, falling to 16,830 yuan per tonne, down approximately 220 yuan from the previous session.

Correction Started on Thursday

Contrary to expectations that the market would continue its upward momentum, Thursday's trading session was dominated by profit-taking activities and growing concerns over increasing supply from major producing countries.

Reuters data showed that rubber futures in Osaka and Shanghai weakened after posting gains over the previous three sessions. The decline coincided with lower oil prices as investors locked in profits following the earlier rally.

Apart from external factors, the market has also started to factor in the seasonal increase in production from Thailand, which has now entered its annual peak tapping season. Thai rubber output generally starts to increase from June and reaches its peak between July and September.

Improving weather conditions in southern Thailand following heavy rainfall in late June have further supported production recovery and strengthened expectations of larger global supplies in the coming weeks.

Synthetic Rubber Is Actually Strengthening

Interestingly, natural rubber prices weakened while the synthetic rubber market moved in the opposite direction.

Since the beginning of July, butadiene rubber (BR) prices in China have surged by more than 10 percent after experiencing three consecutive months of decline. The increase was primarily driven by a sharp rise in butadiene feedstock prices, which have climbed by more than 16 percent since the beginning of the month.

Geopolitical tensions in the Middle East had previously pushed oil prices higher, increasing synthetic rubber production costs. Historically, this situation tends to support natural rubber prices because some industries may shift toward alternative raw materials. However, weak demand from the tire industry has so far prevented these positive effects from being fully reflected in natural rubber prices.

Tire Demand Remains the Weakest Link

The main factor limiting further gains continues to come from the demand side.

Several tire manufacturers in China are still conducting maintenance shutdowns and reducing production during July, a period that is traditionally considered a low-demand season. Elevated raw material costs have also encouraged manufacturers to purchase only for immediate operational needs.

As a result, despite relatively strong raw material prices, downstream demand remains insufficient to support a significant rise in natural rubber prices.

Some analysts also believe that concerns over slowing global economic growth and persistently high interest rates in major economies continue to weigh on demand recovery for industrial commodities, including natural rubber.

Low Inventories Prevent Sharper Declines

Despite demand pressure, the market continues to receive support from relatively tight inventories at several major Asian trading hubs, as well as firm farm-gate raw material prices.

These conditions suggest that the market is unlikely to experience a sharp decline similar to the late-June sell-off, when prices briefly dropped toward the 208 cents/kg level.

In other words, although short-term sentiment remains negative, the market still has sufficiently strong fundamental support to prevent deeper losses.

China Tightens Regulations for the Rubber Industry

Another longer-term factor attracting market attention is China's ongoing revision of emission standards for the rubber products industry.

The proposed regulations will cover tire manufacturing, technical rubber products, medical rubber goods, footwear, and various other rubber products, imposing stricter environmental requirements than previous regulations. The initiative is expected to encourage the transformation of the rubber industry toward more efficient and environmentally friendly production practices.

Although the impact on current prices is likely to be limited, the move is generally viewed as positive for the long-term sustainability of the global rubber industry.

Looking at the Year-to-Date Chart

Looking at the performance of SICOM-TSR20 throughout 2026, prices climbed from a low of 179.9 cents in January to a yearly peak of approximately 234.5 cents in early June.

The sharp correction in late June pushed prices down to 208.6 cents, but the market subsequently staged a recovery and returned to the 214–218 cents range during mid-July.

This pattern suggests that the 208–210 cents area has become a relatively strong medium-term support zone, while the 218–220 cents region remains a major resistance level that has yet to be convincingly broken.

Based on the latest chart observations, the current weakness appears more like a consolidation phase following the early July rebound rather than the beginning of a new bearish trend.

What Could Happen Today?

Since today marks the final trading session before the weekend, many market participants are expected to reduce open positions to avoid geopolitical risks that may emerge while markets are closed.

Therefore, the most likely scenario for today's session is a sideways to slightly bearish movement, with prices expected to trade within a relatively narrow range.

As long as prices remain above the 214 cents level, the market still has room for stabilization and a modest technical rebound before the close.

Technical Analysis Disclaimer

The following technical analysis is indicative only and should not be considered investment or trading advice.

Technically, the 214.0–214.5 cents/kg area represents a critical intraday support zone for today's trading session.

If this support holds, prices could rebound toward the 215.5–216.5 cents/kg range during later sessions.

However, if selling pressure intensifies and prices fall below 214 cents, the next downside target is estimated to be around 212.5–213.0 cents/kg.

On the upside, immediate resistance is located around 216.5–217.0 cents, while the medium-term resistance remains at 218–220 cents, a level that has proven difficult for the market to break in recent trading sessions.

Overall, the highest probability scenario for this weekend's trading is a sideways market with a limited negative bias, while traders continue to monitor developments in oil prices, weather conditions across Southeast Asia, and geopolitical developments in the Middle East, all of which remain key drivers for the global rubber market.