SICOM TSR20 Declines, Natural Rubber Prices Remain at Elevated Levels
Medan, 28 August 2026 – Natural rubber prices on the Singapore Exchange (SICOM) edged lower during Friday's (28 August) trading. As of 4:04 p.m. WIB (UTC+7), the September TSR20 contract had fallen 2.8 US cents/kg to 236.2 US cents/kg, as some market participants engaged in profit-taking following the recent rally. Despite the correction, prices remained at elevated levels, supported by tight supply resulting from adverse weather conditions in major producing countries.
At the same time, the January 2027 RSS3 contract on the Shanghai Futures Exchange (SHFE) rose 280 yuan to 18,940 yuan per metric ton, indicating that market sentiment across Asia remained generally positive amid continued tightness in raw material supply.
Despite today's decline, SICOM TSR20 continues to trade around 236 US cents/kg, one of its highest levels this year. By comparison, TSR20 stood at approximately 181.7 US cents/kg in early January 2026, representing an increase of more than 30% year-to-date.
Supply Constraints Continue to Support the Market
The strength in natural rubber prices over recent weeks has continued to be driven primarily by constrained supply in major producing countries. Persistent rainfall across Thailand, Vietnam, and several rubber-producing regions in China has disrupted tapping activities, preventing raw material supply from recovering to normal seasonal levels.
According to Reuters, the Thai Meteorological Department has maintained heavy rainfall warnings through early September. Meanwhile, natural rubber exports from Thailand and Vietnam during January–July 2026 declined compared with the same period last year. These developments have continued to provide support for international rubber prices.
In Indonesia, the supply of Raw Rubber Material (Bahan Olah Karet/BOKAR) also remains relatively tight due to unfavorable weather conditions, keeping farm-gate and factory raw material prices elevated. Market intelligence provider SunSirs reported that China's natural rubber spot prices rose by approximately 7.94% throughout August, largely driven by tighter raw material availability.
Demand Still Awaiting Seasonal Recovery
On the demand side, the global tire industry remains in its seasonal low-demand period, with manufacturers purchasing raw materials primarily to meet short-term production requirements.
SunSirs reported that operating rates at tire factories have yet to improve significantly. Buyers also remain cautious about building inventories ahead of the traditional "Golden September–Silver October" peak season, resulting in greater resistance to purchases at current elevated price levels.
Meanwhile, rubber inventories in Qingdao have continued to decline. However, overall stock levels remain relatively high and have yet to provide sufficient momentum for a stronger upward price movement.
Today's Correction Considered Healthy
Market analysts believe today's decline in SICOM TSR20 was largely driven by profit-taking after the sharp rally recorded throughout August. From a fundamental perspective, there has been no significant deterioration in market conditions, as supply constraints remain the dominant supporting factor.
Should adverse weather persist across key producing countries, natural rubber prices are expected to remain well supported. Conversely, if weather conditions improve and raw material supply gradually recovers, the upside potential for prices may become more limited.
Disclaimer: Based on the current combination of market fundamentals and technical indicators, SICOM TSR20 is expected to trade within the range of 235–240 US cents/kg in the near term, with a bias toward sideways to modestly higher movement. This outlook represents market analysis based on information available at the time of writing and should not be construed as investment advice or a guarantee of future price performance.
Overall, today's correction does not alter the constructive outlook for the natural rubber market. As long as global supply remains constrained by adverse weather, prices are expected to stay at relatively high levels, although volatility may increase amid profit-taking activities and evolving demand from the global tire industry.