TSR20 Breaks Above 234 Cents Again! Rubber Prices Rebound, Market Eyes Higher Levels

Medan, August 24, 2026 – The natural rubber market showed renewed strength at the start of trading on Monday (August 24), as SICOM TSR20 climbed back above the key psychological level of 234 US cents/kg, boosting optimism that the current rally could extend amid tight global supply and expectations of stronger demand from China.

As of 10:38 a.m. WIB (GMT+7), the September SICOM TSR20 contract was trading at 235.4 US cents/kg, up 2.7 cents from the previous close. Meanwhile, the most-active January 2027 SHFE RSS3 contract rose 195 yuan to 18,690 yuan/ton, representing a gain of approximately 1.05%.

The gains extended last week's rebound, pushing prices to their highest levels in several months.

Weekly Review: Nearly 5% Gain

Over the past week, SICOM TSR20 has maintained a solid upward trend.

The benchmark climbed from 223.7 US cents/kg on August 17 to 232.7 US cents/kg on August 21, before advancing further to 235.4 US cents/kg on Monday morning.

This represents a weekly increase of around 5%, reflecting growing market confidence in the near-term outlook for natural rubber.

The return above the 234-cent threshold is viewed as a significant psychological milestone, suggesting that selling pressure has eased while buying interest continues to improve.

Weather and El Niño Remain Key Market Drivers

On the supply side, weather continues to dominate market sentiment.

Major rubber-producing countries—including Thailand, Indonesia, Malaysia, Vietnam, and parts of China—are still facing weather-related disruptions. Heavy rainfall in several producing regions has hampered tapping activities, preventing a meaningful recovery in raw material output.

In Thailand, persistent rainfall continues to affect rubber tapping, particularly in the northern and northeastern regions. Similar weather conditions are also impacting southern China.

At the same time, expectations surrounding El Niño continue to strengthen. Although its full impact has yet to materialize, market participants are increasingly factoring in the possibility of lower production should dry conditions intensify in the coming months.

As a result, many traders remain reluctant to reduce long positions, believing supply risks remain elevated.

China Offers Hope for Demand Recovery

Demand-side sentiment has also improved, largely driven by China.

Beijing has signaled additional fiscal stimulus measures aimed at supporting economic growth. A stronger Chinese economy is expected to boost manufacturing and automotive production, both of which are major consumers of natural rubber.

The Malaysian Rubber Glove Manufacturers Association (MARGMA) also expects demand for natural rubber—particularly premium and sustainably sourced rubber—to strengthen as global buyers increasingly emphasize traceability and compliance with environmental standards.

However, demand has not fully recovered.

Recent data show that tire manufacturers have slightly increased operating rates compared with the previous week, but utilization remains below year-ago levels. Finished tire inventories also remain relatively high, leading manufacturers to purchase raw materials cautiously.

This suggests that the current rally is being driven primarily by supply concerns rather than a sharp surge in consumption.

Crude Oil and Geopolitical Factors Continue to Support Prices

Crude oil prices have remained relatively firm, providing additional support to the natural rubber market.

Higher oil prices increase the production cost of synthetic rubber, making natural rubber more competitive.

Meanwhile, ongoing geopolitical uncertainties and global trade concerns continue to encourage investors to maintain exposure to commodities with relatively supportive fundamentals, including natural rubber.

Technical Outlook

(Technical analysis is for informational purposes only and should not be considered investment advice.)

From a technical perspective, short-term momentum remains constructive.

As long as SICOM TSR20 holds above the 234 US cents/kg level, prices could continue advancing toward the 236–238 US cents/kg range.

If buying interest from China strengthens further and supply disruptions persist, the market could potentially test the 240 US cents/kg level in the near term.

Nevertheless, profit-taking remains a risk. Should selling pressure increase, the 232–233 US cents/kg range is expected to serve as the first support zone.

Outlook

The return of SICOM TSR20 above 234 US cents/kg signals improving market sentiment. Tight supply due to adverse weather, growing concerns over El Niño, expectations of stronger Chinese demand, and supportive crude oil prices remain the key drivers behind the latest rally.

Although global tire demand has yet to fully recover, constrained supply is expected to limit downside risks. Market participants will continue to monitor weather developments across major producing countries, China's economic stimulus measures, and energy price movements for clues on the next direction of the natural rubber market.

Disclaimer: This analysis is based on market data and publicly available information as of August 24, 2026. The technical outlook reflects market interpretation and probabilities only, and should not be considered investment advice or a recommendation to buy or sell any financial instrument. Commodity prices may change rapidly due to global economic conditions, geopolitical developments, weather, and market sentiment.