Will Rubber Prices Surge Again? Global Inventories Keep Shrinking as TSR20 Opens Higher
Medan, August 27, 2026 – Indonesia’s benchmark export rubber prices started trading higher on Thursday. As of 9:23 a.m. WIB, the September SICOM TSR20 contract was quoted at 237.2 US cents per kilogram, up 0.9 cent from the previous close. Meanwhile, the Shanghai Futures Exchange (SHFE) active January 2027 RU contract climbed 195 yuan to 18,690 yuan per tonne.
The gains indicate that buying interest remains intact despite a modest correction in the previous trading session. On Wednesday (August 26), the benchmark RU contract edged down 5 yuan to 18,540 yuan per tonne, while the NR contract fell 55 yuan to 15,505 yuan per tonne. In the physical market, the price of Thailand’s TSR20 rubber in the Qingdao bonded area also slipped slightly by US$5 to US$2,335 per tonne.
For Indonesia’s rubber industry, TSR20 serves as the most relevant benchmark because the country’s exports mainly consist of SIR20 (Standard Indonesian Rubber 20), whose pricing is closely linked to the SICOM TSR20 benchmark, one of the world’s key references for crumb rubber trading.
Inventories Continue to Decline, Supply Remains Tight
Market fundamentals continue to support prices. One of the key drivers is the ongoing decline in rubber inventories in China.
Latest data show that social inventories of natural rubber fell to around 631,523 tonnes, while stocks at Qingdao Port also declined by more than 11,000 tonnes from the previous week. The continued drawdown suggests that market supply remains relatively tight even as major producing countries enter their peak harvesting season.
At the same time, raw material prices in Thailand remain firm. Concerns over unfavorable weather conditions, including the potential impact of El Niño and rainfall disruptions in several producing regions, continue to support raw material prices and limit the downside for natural rubber.
On the trade front, China’s natural rubber imports during January–July 2026 totaled approximately 3.59 million tonnes, slightly lower than in the same period last year. Meanwhile, China’s tyre exports continued to grow in volume despite a decline in export value due to pricing pressure. This suggests that tyre manufacturing activity remains resilient, although global demand has yet to fully recover.
Demand Remains the Main Challenge
Despite relatively tight supply, downstream demand has yet to show a strong recovery.
China’s passenger vehicle sales in July 2026 declined by more than 20% year-on-year. Operating rates at tyre factories also remained below last year’s levels, reflecting that rubber consumption has not fully recovered.
Several market analysts also noted that rubber prices have already posted substantial gains throughout August. Without fresh bullish catalysts, upside potential in the short term may become more limited, prompting market participants to remain cautious of profit-taking.
TSR20 Outlook for Today
Based on the early trading session, TSR20 still has the potential to maintain its positive momentum, supported by declining global inventories, firm raw material prices, and concerns over weather-related supply disruptions.
However, these supportive factors continue to be offset by weak demand from the tyre industry, suggesting that further price gains are likely to be gradual.
Technical Analysis Disclaimer: The following technical assessment is intended solely as a general market view and should not be considered investment advice or a guarantee of future price movements.
From a technical perspective, as long as TSR20 remains above 236 US cents/kg, bullish momentum is expected to stay intact, with prices having the potential to test the 238–240 US cents/kg range during today’s trading session. On the downside, if profit-taking emerges, the 234–235 US cents/kg area is expected to serve as the first support zone. This outlook is indicative only and may change depending on global market sentiment, weather developments in major producing countries, and shifts in downstream demand.
Overall, natural rubber market fundamentals remain relatively constructive. Declining inventories, elevated raw material prices, and ongoing supply risks continue to provide support for prices. Nevertheless, market participants should closely monitor global demand, which has yet to demonstrate a truly solid recovery.