Global Rubber Prices Surge for a Second Straight Day as SICOM Breaks Above 250 Cents. What's Driving the Rally?
Medan, September 9, 2026 – The global natural rubber market maintained its upward momentum through Wednesday afternoon (September 9), extending the strong rebound seen on Tuesday. The rally has been fueled by growing concerns over tightening global supplies, rising crude oil prices, and persistently low deliverable rubber inventories on China's futures exchanges.
As of 2:40 p.m. WIB (0740 GMT), the October SICOM TSR20 contract was trading at 250.2 US cents per kilogram, up 1.2 cents from the previous close. Meanwhile, the January 2027 SHFE RSS3 contract gained 305 yuan to 19,770 yuan per metric ton, extending the rally that began earlier this week.
The latest gains have pushed SICOM TSR20 to its highest level of 2026, following a sharp climb from 241.9 cents/kg on September 7 to 249.0 cents/kg on September 8, before breaking above the psychological 250-cent mark.
Supply Concerns Continue to Fuel the Rally
The sharp price increase over the past two trading sessions has not occurred by chance. Instead, it reflects a combination of supportive fundamental factors emerging simultaneously.
The most significant driver has been the tightening supply of Indonesian Standard Rubber (ISR), one of the key references for China's NR futures contracts. Indonesian customs data showed that exports of standard rubber to China fell sharply in August compared with the same period last year, reigniting concerns over the availability of deliverable material for nearby futures contracts.
At the same time, NR warehouse receipts on the Shanghai Futures Exchange (SHFE) remain at historically low levels. This has made market participants increasingly sensitive to any supply disruptions, as the amount of deliverable rubber available for futures settlement continues to shrink.
Market analysts also note that alternative supplies from Thailand and Côte d'Ivoire have yet to fully compensate for Indonesia's declining exports. As a result, expectations are growing that the supply of low-cost deliverable rubber will remain tight in the near term.
Higher Oil Prices Provide Additional Support
The energy market has also contributed to the bullish sentiment.
Global crude oil prices have moved back toward US$100 per barrel amid escalating geopolitical tensions in the Middle East, raising concerns about potential disruptions to global energy supplies.
Higher crude oil prices generally support natural rubber because synthetic rubber is manufactured from petroleum-based feedstocks. As production costs for synthetic rubber increase, natural rubber becomes relatively more competitive.
Meanwhile, raw material prices in Thailand and other major producing countries have also remained firm, providing additional support to physical rubber prices.
Inventories Continue to Decline
From a fundamental perspective, market conditions remain relatively healthy.
Natural rubber inventories in Qingdao, China, declined again during the latest reporting period to approximately 619,100 metric tons, down 1.38% from the previous week. The continued inventory drawdown indicates that outbound shipments continue to outpace incoming supplies, suggesting that the market balance remains relatively tight.
In China's physical market, traders have raised spot quotations by approximately 300–400 yuan per metric ton, following the strong rally in futures prices and improving trading activity.
Demand Remains Resilient
Despite rising raw material costs, demand has yet to show signs of significant deterioration.
Analysts acknowledge that downstream manufacturers have become more cautious in purchasing due to higher input costs. However, inventories of both raw materials and finished products have also continued to decline, indicating that end-user demand remains relatively resilient rather than collapsing.
In addition, improving economic indicators and a gradual recovery in China's automotive sector continue to provide underlying support to market sentiment, although domestic consumption has not yet fully returned to pre-slowdown levels.
Weather Remains a Key Risk Factor
Weather conditions remain another closely watched factor as the industry moves deeper into September.
Intermittent rainfall across several rubber-producing regions in Thailand continues to disrupt tapping activities, limiting production recovery. At the same time, market participants remain alert to the potential impact of El Niño, which could affect rubber production in the coming months should drier conditions become more widespread.
Although the phenomenon has yet to cause measurable production losses, it remains an important risk factor that investors continue to monitor closely.
Market Outlook
Fundamentally, the market continues to exhibit a bullish bias. Tight inventories, constrained Indonesian exports, higher crude oil prices, and firm raw material costs have collectively limited the downside risk for rubber prices, unless there is a meaningful improvement in global supply conditions.
From a technical analysis perspective (for reference only and not intended as investment advice), SICOM TSR20's ability to remain above the 250 US cents/kg level could pave the way for a test of the 252–255 US cents/kg range during today's trading session. However, given the sharp gains recorded over the past two days, profit-taking may emerge, potentially leading prices to consolidate within the 247–250 US cents/kg range before establishing the next directional move.
For Indonesia's rubber industry, the current price rally is certainly a welcome development. Nevertheless, whether the upward trend can be sustained will largely depend on Indonesia's export performance, inventory developments in China, weather conditions across major producing countries, and movements in global crude oil prices over the coming days.