Indonesia’s Benchmark Rubber Price Slips in Early Trade After Monday’s Rally, Market Awaits Fresh Direction
Medan, August 18, 2026 – Indonesia’s benchmark natural rubber price opened Tuesday’s trading session (August 18) slightly lower after posting gains in the previous session. The early decline is widely seen as a short-term profit-taking move, while market participants remain cautious as they await fresh signals from global demand, weather conditions in major producing countries, and China’s economic outlook.
As of 8:44 a.m. WIB (0144 GMT), the SICOM TSR20 September contract on the Singapore Exchange (SGX), the primary benchmark for Indonesia’s rubber exports, was trading at 222.3 US cents per kilogram, down 0.7 cent from Monday’s close. Meanwhile, the RSS3 January 2027 contract on the Shanghai Futures Exchange (SHFE) edged up 5 yuan to 17,975 yuan per tonne.
The mixed performance between the two benchmark markets suggests that sentiment remains divided. The pullback in SICOM mainly reflects price consolidation following Monday’s rebound, while the Shanghai market continues to draw support from expectations of steady domestic demand in China.
Stronger Finish in Monday’s Session
Natural rubber prices closed higher on Monday after several sessions of range-bound trading. The SICOM TSR20 September contract settled at 223.7 US cents per kilogram, up from 219.8 US cents per kilogram in the previous session.
The rebound was driven by renewed buying interest after prices approached key support levels, while firmer sentiment across the broader commodity market—particularly supported by resilient crude oil prices—also helped improve market confidence.
Positive sentiment toward the rubber sector was also reflected in Vietnam’s equity market. Although the VN-Index ended lower, rubber-related stocks including PHR, DPR, TRC, and GVR outperformed the broader market, indicating that investors continue to view the sector favorably.
Weekly Review: Prices Recover but Remain in Consolidation
Over the past week, SICOM TSR20 prices have shown a gradual recovery. Compared with 220.8 US cents per kilogram on August 11, the contract climbed to 223.7 US cents per kilogram by Monday’s close.
While the gains have been relatively modest, price action over the past week suggests that selling pressure has eased. Each decline has attracted buying interest, allowing prices to remain above the psychological 220-cent level.
This indicates that the market has yet to establish a convincing upward trend but is also showing no clear signs of renewed weakness, pointing instead to an ongoing consolidation phase.
Fundamentals Remain Balanced
Fundamental conditions in the global rubber market continue to reflect a balance between supply and demand.
On the supply side, August remains part of the peak production season across Southeast Asia, with fresh rubber continuing to enter the market. This seasonal increase in output is limiting the upside potential for prices.
However, weather conditions in Thailand remain less than ideal. Intermittent rainfall and elevated temperatures have disrupted tapping activities in some producing areas, preventing a more significant increase in raw material supply.
On the demand side, China’s tire manufacturing industry remains relatively subdued. Factory operating rates have yet to fully recover as some producers continue seasonal maintenance, while finished tire inventories remain elevated, encouraging manufacturers to purchase raw materials cautiously.
Nevertheless, some indicators are beginning to improve. China’s automobile production and sales during January–July were still down about 3.7% year-on-year, but the pace of decline has continued to narrow, raising hopes that rubber consumption could strengthen later this year if manufacturing activity improves further.
Exchange inventory data also suggest that overall stock levels remain manageable, with warrant volumes declining for several contracts, indicating that supply is not excessive.
El Niño and Oil Prices Continue to Support the Market
Weather developments remain another important factor closely monitored by market participants.
According to the latest outlook from the U.S. National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center, the El Niño phenomenon is expected to strengthen further through the end of 2026, with a very high probability of becoming exceptionally strong during October–December. Such conditions could disrupt rubber production across major producing countries if rainfall patterns become increasingly unfavorable.
At the same time, relatively firm global crude oil prices continue to provide indirect support for natural rubber by increasing production costs for synthetic rubber, thereby improving the competitiveness of natural rubber.
Meanwhile, investors are also closely watching China’s economic policies. Additional stimulus measures targeting the property or manufacturing sectors could improve industrial activity and ultimately boost demand for natural rubber.
Outlook for Today’s Trading
Considering both the current fundamental backdrop and recent price action, Tuesday’s trading is expected to remain largely sideways with a mildly bearish bias.
The absence of a strong positive catalyst is likely to limit further gains. However, downside risks also appear contained, supported by weather-related supply concerns, manageable inventories, and expectations of gradually improving demand during the second half of the year.
Unless unexpected developments emerge from global economic data or the U.S. dollar, prices are expected to trade within a relatively narrow range.
Technical Outlook (Disclaimer)
Disclaimer: The following technical analysis is based on recent market price patterns and is provided for informational purposes only. It should not be considered investment or trading advice.
Recent price action suggests that the short-term recovery remains intact, although upward momentum is beginning to face resistance. As long as SICOM TSR20 holds above the 221–222 US cents per kilogram area, prices may have room to retest the 224–226 US cents per kilogram range.
Conversely, if selling pressure intensifies and prices fall below this support zone, the market could return to a sideways pattern, with 219–220 US cents per kilogram serving as the next key support area.
Overall, recent price behavior indicates that buyers are still defending the short-term recovery structure, although momentum has yet to become strong enough to establish a sustained bullish trend.
Conclusion
Indonesia’s benchmark rubber price opened Tuesday’s session with a modest pullback following Monday’s advance. The decline appears to be driven primarily by short-term profit-taking rather than any significant deterioration in market fundamentals.
While seasonal production remains high, the market continues to receive support from concerns over potential weather-related supply disruptions linked to El Niño, stable inventory conditions, and expectations for a gradual recovery in Chinese demand during the second half of the year.
For today, the market is expected to remain range-bound with a slightly weaker tone, as traders await fresh catalysts from global economic developments, China’s tire industry, and weather conditions across the world’s major rubber-producing regions.