Rubber Prices Remain Under Pressure as Market Extends Two-Day Decline; Traders Await Fresh Direction Ahead of Week's Close
Medan, August 14, 2026 – Global natural rubber prices continued to weaken during Friday's (Aug. 14) midday trading session, extending the losses recorded a day earlier. The back-to-back decline reflects a cautious market as traders weigh the prospect of rising supply against demand that has yet to show a convincing recovery.
As of 11:36 a.m. WIB, the most active RSS3 January 2027 contract on the Shanghai Futures Exchange (SHFE) stood at 17,765 yuan per metric ton, down 120 yuan, or approximately 0.67%. Meanwhile, the benchmark SICOM TSR20 contract in Singapore was trading at 219.7 U.S. cents per kilogram, down 0.3 U.S. cents from the previous session.
Friday's decline follows Thursday's correction after the market failed to sustain earlier gains, with profit-taking emerging alongside growing expectations that seasonal production in major rubber-producing countries will continue to increase.
Despite the weakness, downside pressure remains relatively limited as market participants continue to monitor weather-related supply disruptions in Southeast Asia and the outlook for demand from the global tire industry.
Supply Expected to Improve, but Weather Remains a Key Risk
Fundamentally, the market continues to be influenced by two opposing forces.
On one hand, heavy rainfall in several major producing regions has disrupted tapping activities, temporarily limiting raw material availability. This has helped keep Thai cup lump prices relatively firm.
On the other hand, investors are increasingly pricing in a seasonal increase in rubber production over the coming weeks. Several market analysts believe that additional supply could cap any significant price rally unless global demand strengthens accordingly.
Data from Malaysia also showed that natural rubber exports in June increased sharply compared with the same period last year. Although first-half production remained below last year's level, the month-on-month improvement indicates that production activities have begun recovering following earlier weather-related disruptions. China remained the largest export destination for Malaysian natural rubber.
Demand Recovery Still Lacks Momentum
Demand conditions remain mixed, particularly within the global tire manufacturing industry.
Tire factories in China recorded a modest improvement in operating rates as several production lines resumed operations following scheduled maintenance. However, the increase has been limited and has yet to significantly reduce inventories across the sector.
Some manufacturers continue relying on price discounts to stimulate sales, highlighting that downstream demand remains relatively soft. As a result, upside potential for natural rubber prices appears limited in the near term.
Meanwhile, the Association of Natural Rubber Producing Countries (ANRPC) reported that global natural rubber production in June remained below last year's level, while consumption continued to grow, led primarily by China and India. The organization also warned that the ongoing El Niño phenomenon could continue disrupting production through the end of the year, leaving the global supply-demand balance vulnerable to weather-related risks.
External Factors Continue to Shape Market Sentiment
Beyond industry fundamentals, developments in the energy market remain an important driver of rubber prices.
Weaker crude oil prices have reduced the competitiveness of natural rubber relative to synthetic rubber, which is derived from petroleum-based feedstocks. At the same time, geopolitical uncertainty in the Middle East—particularly surrounding the Strait of Hormuz—continues to add volatility to commodity markets and remains a key factor being monitored by investors.
Market Outlook for Today's Session
Based on price movements through midday, the market appears to remain in a consolidation phase. Selling pressure is still evident, although there has not yet been sufficient momentum to trigger a deeper decline.
Unless a significant new catalyst emerges during the afternoon session, natural rubber prices are expected to trade sideways with a slightly bearish bias through the close of trading.
Technical analysis disclaimer: Based on recent price action and subject to changing market conditions, the active SHFE rubber contract is estimated to fluctuate within a range of 17,650–17,900 yuan per metric ton for today's session. The 17,650-yuan area is seen as the nearest support level, while 17,900–18,000 yuan represents the immediate resistance zone that would need to be broken for bullish momentum to strengthen. This assessment is provided for informational purposes only and should not be considered investment advice.
Overall, the market is still waiting for a stronger catalyst to determine its next direction. As long as seasonal supply continues to increase while downstream demand remains relatively subdued, natural rubber prices are likely to remain range-bound with elevated volatility.