Rubber Prices Extend Gains, Market Expected to Trade Sideways with a Positive Bias Ahead of the Weekend
Medan, July 23, 2026 – Natural rubber prices continued to strengthen on Thursday morning after closing higher in the previous trading session. The latest gains extend the recovery trend that has been developing since mid-July, although the market remains cautious as global supply gradually increases during the peak tapping season in major producing countries.
Based on market observations at 10:35 WIB, the SICOM TSR20 August contract on the Singapore Exchange (SGX) was trading at US¢219.5/kg, up 1.1 US cents from the previous close. Meanwhile, the RSS3 September contract, the most actively traded contract on the Shanghai Futures Exchange (SHFE), rose 30 yuan to 16,955 yuan per metric ton.
The gains in both benchmark markets indicate that overall market sentiment remains positive. However, the pace of the rally has moderated compared with recent sessions as some investors have started taking profits ahead of the weekend.
Yesterday's Rally Supported by Demand Optimism
Rubber prices closed higher on Wednesday (July 22), as buyers returned to the market following several sessions of price consolidation.
In addition to technical buying, positive sentiment was supported by the continued decline in China's natural rubber market inventories. The latest data show that China's natural rubber market inventories stood at approximately 1.21 million metric tons as of July 12, 2026, down by around 11,000 metric tons (0.9%) from the previous week.
The decline in market inventories suggests that domestic consumption continues to absorb available supply, helping maintain a balanced market despite the seasonal increase in production across Southeast Asia.
Morning Session Likely to Trade Within a Narrow Range
Trading during Thursday morning reflected some profit-taking, resulting in a slower pace of gains than the previous session.
Such movement is considered normal as the market approaches the end of the trading week. Many investors and industry participants typically reduce their positions before the weekend to manage risks associated with potential weather developments in producing countries and broader global economic news.
Under these conditions, today's market is expected to move sideways with a slight upward bias. Unless a significant new catalyst emerges, prices are likely to remain within the current trading range while participants await fresh market direction.
Fundamentals Remain Supportive Despite Increasing Supply
From a fundamental perspective, the global natural rubber market remains relatively balanced.
Weather conditions in Thailand, the world's largest natural rubber producer, have not deteriorated significantly, allowing tapping activities to continue under generally normal conditions. Although rainfall has temporarily disrupted harvesting in parts of Vietnam, Yunnan, and Hainan, these interruptions are viewed as short-term and have not materially reduced global supply.
On the demand side, several tire manufacturers in China are still undergoing maintenance, particularly passenger vehicle tire producers. Nevertheless, the continued decline in rubber market inventories indicates that demand has not weakened further. Consumption remains sufficient to absorb current supply.
Overall, market fundamentals remain balanced. Seasonal production is increasing, but not enough to create a significant oversupply. Meanwhile, demand has yet to fully recover but also shows no signs of substantial deterioration.
Year-to-Date Trend Remains Positive
Based on SICOM TSR20 performance throughout 2026, the broader price trend remains constructive.
The benchmark, which started the year at US¢181.7/kg, climbed to a peak of approximately US¢234.5/kg in early June before correcting to around US¢208.6/kg at the end of June.
Since the beginning of July, prices have gradually recovered. From levels near US¢209/kg, SICOM TSR20 has now moved back above US¢219/kg, indicating that the market remains in a recovery phase following the sharp correction in late June.
Technical Outlook: Recovery Momentum Remains Intact
From a technical perspective, the market continues to maintain its rebound pattern established earlier this month.
As long as prices remain above the US¢218/kg support area, there is potential for the market to test the US¢220–222/kg range. Should buying momentum strengthen further, prices could even challenge the US¢223/kg level.
Conversely, if profit-taking intensifies ahead of the weekend, the US¢217–218/kg area is expected to provide the nearest technical support.
Disclaimer: This technical analysis represents an interpretation of current price movements and should not be regarded as a guarantee of future market direction. Commodity prices remain subject to various external factors, including weather conditions, exchange rate movements, global economic developments, and changes in supply and demand.
Conclusion
Natural rubber prices have maintained their positive momentum after Wednesday's gains and continued to edge higher during Thursday morning's trading session. The continued decline in China's rubber market inventories remains one of the key factors supporting market optimism, while weather conditions in major producing countries have yet to create any meaningful supply disruptions.
Taking both fundamental and technical factors into account, today's market is expected to trade sideways with a positive bias. Unless new negative developments emerge, SICOM TSR20 is likely to fluctuate within the US¢218–222/kg range, with the possibility of testing US¢223/kg if buying interest strengthens. Nevertheless, as the weekend approaches, trading is expected to remain cautious, with many market participants continuing to lock in profits while awaiting fresh market catalysts next week.