Rubber Prices Recover After Correction, Likely to Remain at Elevated Levels
Medan, August 6, 2026 – Natural rubber prices rebounded in Thursday morning trading after coming under pressure in the previous session. As of 9:25 a.m. WIB, the September SICOM-TSR20 contract on the Singapore Exchange (SGX) was quoted at 218.9 US cents/kg, up 1.3 US cents, while the September RSS3 (RU) contract on the Shanghai Futures Exchange (SHFE) climbed 225 yuan to 16,930 yuan/ton.
The rebound extended the recovery that began late in Wednesday's trading session. Earlier on Wednesday morning, the market had weakened amid profit-taking and concerns over rising supply from major producing countries. However, selling pressure gradually eased as buying interest returned toward the close, allowing prices to recover and finish the session higher. That positive momentum has continued into Thursday morning.
Market Sentiment Improves
The recovery has been supported by several fundamental factors. In China, natural rubber inventories at Qingdao continued to decline as outbound shipments exceeded inbound arrivals, indicating that industrial demand for raw materials remains relatively healthy.
Meanwhile, raw material prices in Thailand have remained broadly stable, preventing additional downward pressure on the market. A generally firmer sentiment across the broader commodities sector has also encouraged traders to return to the market following the recent correction.
Nevertheless, market participants remain cautious about the seasonal increase in production across Southeast Asia. As the peak tapping season progresses, higher supply from producing countries may limit the upside potential for prices in the short term.
Long-Term Outlook Remains Constructive
Despite short-term fluctuations, the medium- to long-term outlook for natural rubber remains broadly positive.
Many analysts continue to expect supportive market conditions over the longer term. In addition to concerns over the potential impact of El Niño on production in key growing regions, market participants also note that global production capacity has not expanded significantly following years of relatively limited investment in new plantations.
The Association of Natural Rubber Producing Countries (ANRPC) projects global natural rubber production to increase by around 2.3% in 2026. However, the increase is not expected to create a significant supply surplus. On the demand side, the global tire industry continues to serve as the primary driver of natural rubber consumption.
In Japan, Osaka Exchange (OSE) rubber futures also recovered from early losses in the previous session before closing unchanged, reflecting cautious market sentiment amid expectations of higher seasonal supply and weaker crude oil prices. Overall, the market appears to be searching for a new equilibrium.
Sideways Movement Likely
Based on Thursday morning's trading activity, selling pressure appears to have eased, while buying interest has gradually returned after the recent decline. However, traders remain cautious and are waiting for stronger market catalysts before taking more aggressive positions.
In the absence of fresh fundamental developments, rubber prices are expected to move sideways, fluctuating around current levels with relatively limited volatility. This suggests that the market is undergoing a consolidation phase following the rebound that began at Wednesday's close.
From a technical perspective, downside momentum has started to weaken. As long as prices remain above near-term support levels, the market is likely to maintain its current trading range. On the other hand, should selling pressure re-emerge, any downside movement is expected to represent a consolidation rather than a broader trend reversal.
Disclaimer: Technical analysis represents an interpretation of market price movements and should not be considered a guarantee of future price direction or investment advice. Market performance remains subject to changing fundamentals and investor sentiment.
Overall, supported by relatively stable fundamentals, declining inventories at major trading hubs, and renewed buying interest following the recent correction, the natural rubber market continues to show resilience. While seasonal supply growth may limit further gains in the near term, prices are expected to remain at relatively elevated levels.