Rubber Prices Ease at Week’s End, SICOM Holds Above 216 Cents as Market Expected to Trade Sideways
Medan, July 24, 2026 – The global natural rubber market entered Friday’s trading session with signs of consolidation after posting gains in the previous session. Selling pressure emerged across several Asian exchanges on Friday morning, although it has yet to signal a meaningful shift in the broader market trend.
As of 10:35 a.m. WIB, the August SICOM TSR20 contract on the Singapore Exchange (SGX) was trading at 216.75 US cents per kilogram, down 2.6 cents from the previous close. Meanwhile, the most active September RSS3 contract on the Shanghai Futures Exchange (SHFE) declined 175 yuan to 16,750 yuan per metric ton.
Despite the pullback, prices remain significantly above the lows recorded at the end of June, suggesting that the market is still undergoing a healthy consolidation phase following a solid recovery over the past several weeks.
Thursday’s Rally Supported by Stronger Oil Prices
Rubber prices strengthened on Thursday (July 23) after crude oil climbed to its highest level in nearly six weeks.
Oil prices were supported by growing concerns over global supply disruptions following renewed geopolitical tensions in the Red Sea and around the Strait of Hormuz. Higher crude oil prices generally provide indirect support to natural rubber because synthetic rubber, which is derived from petroleum, becomes more expensive.
China’s physical rubber market also recorded gains. Domestic full latex rubber prices increased to 17,200 yuan per ton, while Thailand's TSR20 blended rubber rose to 16,780 yuan per ton.
Friday's Decline Seen Mainly as Profit-Taking
The softer market seen on Friday morning is widely viewed as a round of profit-taking following Thursday's rally rather than a deterioration in market fundamentals.
Since Friday marks the final trading session of the week, many investors prefer to reduce open positions ahead of the weekend to avoid potential geopolitical or macroeconomic surprises.
As a result, the market is unlikely to establish a strong upward or downward trend today and is expected to remain largely range-bound, awaiting fresh catalysts.
Fundamentals Remain Generally Balanced
From a fundamental perspective, there has been little change capable of driving a major move in rubber prices.
Weather conditions in major producing countries, including Thailand, Vietnam, China's Yunnan Province and Hainan Island, continue to be affected by intermittent rainfall. However, these weather disruptions remain localized and have not significantly reduced overall rubber production.
Moreover, global rubber output is entering its seasonal expansion period, allowing fresh supplies to gradually enter the market.
On the demand side, China's natural rubber inventories continued to decline. As of July 12, 2026, total social inventories fell to approximately 1.21 million metric tons, down around 11,000 tons, or 0.9%, from the previous week. The continued inventory drawdown suggests that supply is still being absorbed by the market.
However, demand has yet to fully recover. Several Chinese tire manufacturers, particularly semi-steel tire producers, are still undergoing scheduled maintenance, resulting in plant utilization falling to approximately 57%. Nevertheless, finished tire inventories have also declined, indicating that demand has weakened but not collapsed.
Overall, the market currently reflects a relatively balanced situation, with seasonal supply growth offset by demand that remains soft but stable.
Charts Continue to Indicate a Consolidation Phase
Looking at SICOM TSR20's performance this year, prices have rebounded impressively from their late-June low of 208.6 US cents/kg to 219.3 cents/kg on Thursday.
However, recent price action shows the rally losing momentum near the 219–220 cents/kg area, indicating a relatively strong resistance zone. Meanwhile, buying interest continues to emerge around 215–216 cents/kg, providing short-term support.
As long as prices remain above this support zone, a deeper bearish reversal has yet to be confirmed.
Technical Outlook: Sideways Trading Still the Most Likely Scenario
Disclaimer: The following technical analysis reflects market observations based on price patterns and should not be considered investment advice or a recommendation to buy or sell futures contracts.
Based on current market conditions, SICOM TSR20 is expected to trade within a range of approximately 215 to 218 US cents per kilogram during Friday's session.
Should selling pressure intensify and prices break below 215 cents, further downside toward 213–214 cents/kg could become possible.
Conversely, if prices remain above 216 cents and buying interest re-emerges, the market may attempt another test of the 218–219 cents/kg resistance area.
Given that today is the final trading day of the week and no major new market catalysts have emerged, the most probable scenario remains sideways trading with moderate volatility.
Market Outlook
Overall, the natural rubber market continues to receive support from declining Chinese inventories, firm crude oil prices, and relatively stable raw material prices across major producing countries.
However, upside momentum remains limited by still-soft demand from China's tire manufacturing sector and the seasonal increase in rubber production across producing regions.
Taken together, these factors suggest that natural rubber prices are likely to remain cautious in the near term, with market participants closely monitoring upcoming demand indicators, weather developments in producing countries, and movements in global energy prices, which continue to play an important role in shaping commodity market sentiment.