Rubber Prices Rebound Sharply at the Start of the Week as Market Sentiment Improves Following Last Week’s Correction—Can They Reach New Highs?
Medan, September 7, 2026 – The natural rubber market opened the week on a much more positive note. After coming under pressure over the past several trading sessions, rubber futures staged a strong rebound on Monday morning. The October SICOM TSR20 contract climbed to 242.8 US cents/kg, up 8.4 cents, while the January 2027 RSS3 contract on the Shanghai Futures Exchange (SHFE) rose to 19,345 yuan per tonne, gaining 575 yuan from the previous close.
The sharp rally signals that market participants have returned to buying after last week’s correction. Earlier, rubber contracts on the Osaka Exchange (OSE) had recorded their steepest weekly decline since late June, pressured by a stronger Japanese yen and profit-taking after prices reached multi-year highs.
A Rebound Following a Healthy Correction
Looking at price movements over the past week, SICOM underwent a period of consolidation. After briefly reaching 243 US cents/kg at the end of August, prices retreated to the 232–235 US cents/kg range in early September. The pullback was driven mainly by profit-taking rather than any deterioration in market fundamentals.
Today’s rebound indicates that buying interest has returned as prices entered what traders consider an attractive valuation zone. Such price action is common after an extended rally, as markets often require a consolidation phase before resuming their broader trend.
Why Are Prices Rising Again?
Today’s gains are supported by several fundamental factors that continue to underpin the global natural rubber market.
On the supply side, persistent heavy rainfall across major producing countries in Southeast Asia continues to disrupt tapping activities. Thailand, Indonesia, and Vietnam are still facing production uncertainty due to adverse weather conditions, preventing raw material supply from fully recovering.
In addition, several industry institutions project that global natural rubber consumption this year will continue to exceed production. This supply deficit has made the market highly sensitive to any disruption in output.
Another supporting factor is the sustained strength in global energy prices. Higher crude oil prices have increased the production costs of synthetic rubber, prompting some industrial users to shift back toward natural rubber. At the same time, geopolitical tensions in the Middle East have continued to support oil prices, further strengthening bullish sentiment across the broader commodity markets.
Tire Manufacturers Begin Adjusting Prices
The sharp increase in raw material costs has also started to affect downstream industries. Several global tire manufacturers have announced price adjustments as production costs continue to rise significantly.
However, analysts believe these price increases have yet to fully offset higher rubber costs. With consumer demand still recovering, many manufacturers remain cautious about implementing more aggressive price hikes. This factor could limit further upside in rubber prices over the short term.
Fundamentals Remain Constructive
Overall, market fundamentals remain relatively supportive. Inventories are not excessive, production continues to face weather-related disruptions, and demand from the tire industry remains resilient despite moderate growth.
Many analysts believe the medium-term trend remains positive, although price volatility is expected to stay elevated as the market remains highly sensitive to weather developments, geopolitical events, and the global economic outlook.
Today's Outlook
From a technical analysis perspective (this is not investment advice), today’s strong rebound opens the possibility for SICOM to retest the 245–248 US cents/kg range, provided buying momentum continues through the European trading session.
Meanwhile, for the SHFE January 2027 contract, the 19,500–19,700 yuan per tonne range will be a key resistance area to monitor. Should selling pressure emerge near those levels, the market may enter another consolidation phase before determining its next direction.
Market participants are advised to closely monitor weather conditions in major producing countries, energy price movements, and broader global market sentiment, as these factors are expected to remain the primary drivers of natural rubber prices in the near term.