Global Rubber Prices Extend Rebound for a Second Day, Supported by Heavy Rain in Thailand and Surging Oil Prices — Will the Recovery Hold Through the Weekend?
Medan, July 31, 2026 – The global natural rubber market continued to show signs of recovery after experiencing a sharp correction earlier this week. As of 11:01 a.m. WIB (Western Indonesian Time) on Friday, August SICOM TSR20 futures on the Singapore Exchange (SGX) had risen 3.7 US cents to 220.0 US cents per kilogram, while the most-active September RSS3 contract on the Shanghai Futures Exchange (SHFE) climbed 125 yuan to 16,495 yuan per metric ton.
The gains marked the second consecutive day of rebound after Thursday's recovery, although market participants still believe the rally is mainly driven by short-term sentiment rather than a fundamental shift in global supply and demand.
Rebound Follows Sharp Midweek Correction
Price movements over the past three trading sessions have reflected rapidly changing market sentiment.
On Wednesday (July 29), the August SICOM TSR20 contract fell sharply from 217.1 to 213.5 US cents per kilogram, as traders reacted to expectations of increasing global supply during the peak tapping season.
However, the market staged a recovery on Thursday (July 30), with the contract closing at 216.3 US cents per kilogram. Intraday trading even saw prices briefly surge to nearly 222 US cents per kilogram before easing toward the close. The rebound indicated renewed buying interest after the heavy selling pressure seen a day earlier.
The positive momentum continued into Friday morning, with prices advancing to 220.0 US cents per kilogram, suggesting that buying interest remains intact despite cautious market sentiment.
Thailand's Weather and Oil Prices Provide Support
One of the key drivers behind the rebound has been growing concern over weather conditions in Thailand.
Heavy rainfall is forecast across Thailand's major rubber-producing regions through early August, potentially disrupting tapping activities and temporarily reducing raw material production.
Although the disruption is expected to be temporary, any risk to supply from the world's largest natural rubber producer tends to provide immediate support to prices.
Another supportive factor comes from the energy market.
Global crude oil prices surged sharply following renewed geopolitical tensions in the Middle East and a decline in U.S. crude oil inventories. Higher oil prices generally benefit natural rubber because they increase production costs for synthetic rubber, which is derived from petroleum.
Fundamental Conditions Still Face Supply Pressure
Despite the rebound, the market's underlying fundamentals have not changed significantly.
Southeast Asia remains in the peak tapping season, with production continuing to increase in Thailand, Vietnam, and Hainan Province in China. As a result, global natural rubber supply is expected to remain abundant in the coming weeks.
Meanwhile, inventories in Qingdao remain relatively high. Warehouse inflows continue to slightly exceed outflows, slowing the pace of inventory reduction.
On the demand side, China's tire industry is still in its traditional seasonal slowdown during July and August. Manufacturers are purchasing raw materials mainly to meet immediate production needs rather than rebuilding inventories.
In addition, China's automobile production and sales during the first half of 2026 remained below last year's levels, limiting growth in natural rubber consumption.
Consequently, while weather-related concerns have provided temporary support, the market continues to face headwinds from seasonal supply growth and still-soft downstream demand.
Technical Analysis: Rebound Emerges, but Confirmation Is Still Needed
Based on the latest market charts, the August TSR20 contract successfully rebounded from around 212 US cents per kilogram and has returned to the 220-cent range.
The recovery suggests that selling pressure has eased following Wednesday's sharp decline, while trading volume has increased compared with previous sessions.
However, open interest has yet to show a meaningful increase, indicating that the current rally is likely driven primarily by short covering and short-term buying rather than a significant inflow of new long positions.
Disclaimer: The following technical analysis represents an interpretation based on chart patterns and technical indicators. It should not be considered a guarantee of future market direction or investment advice.
As long as prices remain above the 216–217 US cents per kilogram support zone, the market is likely to maintain its consolidation pattern. If buying momentum continues, prices could test the 220–222 US cents per kilogram resistance area.
Conversely, should selling pressure re-emerge after the rebound, prices are expected to move sideways within the 217–220 US cents per kilogram range without establishing a new trend.
Outlook for the Weekend
Considering both the current fundamental and technical landscape, the most likely scenario heading into the weekend is sideways trading with a modest upward bias.
Supportive factors such as heavy rainfall in Thailand and stronger oil prices have helped trigger the recent rebound. Nevertheless, abundant seasonal supply and subdued industrial demand continue to limit the upside potential.
In other words, the market appears to be building a base following the sharp correction earlier this week. However, a stronger and more sustainable uptrend will likely require additional catalysts, such as improved global demand or more prolonged supply disruptions.
For Indonesia's natural rubber industry, the recent rebound offers encouraging signs that downward price pressure may be easing. Even so, market participants are expected to remain cautious, as volatility is likely to stay elevated heading into August.