Rubber Prices Rebound! Supply Concerns Return, Can TSR20 Break Through 236 Cents Today?

Medan, September 3, 2026 – The natural rubber market rebounded on Thursday morning after retreating in the previous session. The recovery was driven by renewed supply concerns as unfavorable weather continued to affect key producing regions, while global demand fundamentals remained resilient.

As of 10:15 a.m. WIB, the October SICOM TSR20 contract was trading at 234.0 US cents/kg, up 1.2 cents from the previous session. At the same time, natural rubber futures on the Shanghai Futures Exchange (SHFE) also moved higher, reflecting renewed market optimism over the short-term outlook.

Thursday's gains suggest that Wednesday's decline was more of a healthy profit-taking correction rather than a reversal of the broader trend.

Yesterday's Pullback Was a Healthy Correction

On Wednesday (September 2), the October SICOM TSR20 contract settled at 232.8 US cents/kg, down from 243.0 US cents/kg, the recent yearly high reached earlier this week, and lower than the previous close of 235.1 US cents/kg. The decline followed a strong rally throughout August, during which prices climbed to their highest level of the year.

The weakness, however, proved short-lived. By Thursday morning, prices had recovered to 234.0 US cents/kg, indicating that buying interest remained intact amid supportive market fundamentals.

Supply Continues to Dominate Market Sentiment

Market attention remains focused on the supply side.

Persistent rainfall across major rubber-producing areas in Thailand, Yunnan (China), and other parts of Southeast Asia continues to disrupt tapping activities. Since rubber trees cannot be tapped when their bark is wet, daily latex production has been temporarily reduced.

Meanwhile, Mengla County in Yunnan Province—one of China's largest rubber-producing regions—experienced heavy rainfall and flooding in late August. Although the impact is expected to be temporary, the disruption has reinforced concerns over near-term supply availability.

Production trends among major producers also remain mixed.

Thailand has reported better-than-expected output following recent data revisions. Elevated rubber prices have encouraged farmers to increase tapping activity, resulting in higher production compared with last year.

Vietnam, however, continues to post a much sharper production decline than previously expected. Output through July remained significantly below last year's level, making Vietnam one of the key uncertainties in the global supply outlook.

Demand Remains Resilient

On the demand side, natural rubber consumption continues to hold up relatively well.

Although passenger tire production softened during August, truck and bus tire production continued to expand, keeping overall natural rubber consumption for January–August approximately 2.1% higher than the same period last year.

Tire manufacturers have also begun passing higher raw material costs on to customers through price increases. So far, there has been no significant decline in production, allowing rubber demand to remain relatively stable.

Canada's Trade Investigation Seen as Having Limited Impact

Another issue attracting market attention is Canada's anti-dumping and countervailing investigation into truck and bus tires imported from China.

However, most analysts believe the impact will be more psychological than fundamental.

China's exports of truck and bus tires to Canada account for only around 2.5% of its total exports, limiting the direct impact on global natural rubber demand.

In addition, China's tire industry has considerable experience dealing with trade disputes and is expected to adjust its export markets accordingly.

Inventories Remain Under Control

Inventory data also show no sign of excessive oversupply.

Rubber inventories in Qingdao stand at approximately 62,770 tons (bonded and general trade warehouses combined) and continue to trend slightly lower. Meanwhile, China's total social rubber inventory is around 114,400 tons, only marginally higher than the previous week.

These figures suggest that supply and demand remain broadly balanced, providing little downward pressure on prices.

Strong Uptrend Still Intact This Year

From a broader perspective, SICOM TSR20 has maintained a strong upward trend throughout 2026.

Prices opened the year at around 181.7 US cents/kg, corrected to the 208–211 cents/kg range in late June, and then rallied sharply throughout August to reach 243 US cents/kg, the highest level of the year.

At 234 US cents/kg this morning, the benchmark remains about 29% higher than at the beginning of the year, indicating that the medium-term uptrend remains intact despite recent short-term volatility.

Today's Market Outlook

As long as weather-related disruptions continue to limit tapping activity across Southeast Asia and demand from the tire industry remains resilient, sentiment toward natural rubber prices is expected to stay broadly positive.

Nevertheless, market volatility is likely to remain elevated as traders continue to monitor weather developments, production data, international trade policies, and the broader global economic environment.

SICOM TSR20 Technical Analysis (Not Investment Advice)

Based on this year's price action, SICOM TSR20 remains in an overall upward trend despite retreating from its recent high of 243 US cents/kg to 232.8 US cents/kg in the previous session. Thursday morning's rebound to 234 US cents/kg indicates that selling pressure has begun to ease and buyers are returning to the market.

As long as prices remain above the 232–233 US cents/kg area, the short-term bullish outlook remains intact. The 236 US cents/kg level represents the nearest resistance. A successful breakout above this level could open the way toward 238–240 US cents/kg during today's session or over the next several trading days.

On the downside, if prices fall below 232 US cents/kg, the correction could extend toward the 229–230 US cents/kg support zone.

Disclaimer: This technical analysis is based on historical price movements and market conditions as of 10:15 a.m. WIB on September 3, 2026. Commodity prices are influenced by numerous factors, including weather conditions, the global economy, exchange rates, and market sentiment. Accordingly, this analysis is intended for informational purposes only and should not be considered a recommendation to buy or sell natural rubber futures contracts.