Rubber Prices Remain Under Pressure, SICOM-TSR20 Falls to 234.8 Cents — Profit Taking Continues as Prices Approach Support Levels
Medan, September 15, 2026 — Rubber prices came under renewed pressure in Tuesday afternoon trading. The correction seen the previous day has yet to run its course. As of around 3:20 p.m. WIB, the October SICOM-TSR20 contract was trading at 234.8 US cents/kg, down approximately 3.2 cents.
Meanwhile, the most active January 2027 natural rubber contract on the Shanghai Futures Exchange (SHFE) stood at 18,720 yuan per tonne, down 330 yuan, or around 1.73%. The data shows that selling pressure is not confined to Singapore but has also spread to major Asian futures markets.
The latest correction is becoming increasingly significant because SICOM-TSR20 had already declined from 243.2 cents on September 11 to 238.3 cents on September 14, before falling further to 234.8 cents this afternoon. As a result, over the past two trading sessions, the contract has lost approximately 8.4 cents, or 3.5%.
After a Sharp Rally, the Market Enters a Profit-Taking Phase
The price movement indicates that the market is undergoing profit taking after a sharp rally in early September.
SICOM-TSR20 moved from 241.9 cents on September 7 to 249.0 cents on September 8 and reached 249.9 cents on September 9. Prices then reversed lower to 246.0 cents on September 10, 243.2 cents on September 11, 238.3 cents on September 14, and now 234.8 cents on September 15.
This means the market is not merely experiencing a one-day decline but has already formed a multi-session correction.
The pressure is also consistent with developments across Asian exchanges. On Monday, the January rubber contract on SHFE fell 1.91% to 18,970 yuan per tonne. Osaka rubber futures also weakened, reaching their lowest level in about a month, while the November SICOM contract also recorded a decline.
These developments indicate that selling pressure is currently quite evident. However, this does not necessarily mean that the medium-term uptrend has automatically ended.
Why Is Profit Taking Occurring?
Several factors are prompting market participants to reduce positions following the previous rally.
First, prices rose very rapidly, prompting some market participants to lock in profits. The increase in SICOM-TSR20 from around 219 cents in mid-August to nearly 250 cents in early September represented a substantial gain over a relatively short period.
Second, the previous rally was driven largely by weather concerns and expectations of lower production due to El Niño, rather than by a sudden surge in rubber consumption.
These expectations have indeed been among the key factors supporting prices. Strong El Niño conditions have increased concerns over hot and dry weather in Southeast Asia's major rubber-producing regions. Such conditions could disrupt tapping activities and rubber production.
However, the issue is that expectations of lower production have not yet fully translated into an actual decline in production. This gives the market room to correct after the previous price increase was driven heavily by concerns over future supply.
Fundamentals Do Not Yet Fully Support High Prices
On the supply side, the market is facing fairly serious risks. Southeast Asia is currently entering a period of relatively high rubber production. Under normal conditions, seasonal supply tends to increase.
However, hot and dry weather can disrupt tapping activity and latex production. As a result, the market is beginning to price in the possibility of lower production during the fourth quarter of 2026 and into early 2027.
The problem is that there is currently no clear evidence of a large-scale decline in actual production. In other words, what the market is trading at this stage is still largely an expectation about future supply conditions.
This is what makes rubber prices particularly sensitive. If weather conditions deteriorate significantly and production falls, supply concerns could once again push prices higher. Conversely, if weather conditions improve or the production decline is smaller than expected, the weather-related premium embedded in prices could quickly fade.
Demand Remains a Weak Point
On the demand side, the picture remains relatively weak.
Available data indicate that China's tire industry is still facing pressure. Utilization rates among steel-belted tire producers have declined, while natural rubber purchases by tire manufacturers have weakened amid high raw-material prices.
Previous reports also showed that operating rates at semi-steel tire factories remained below historical averages, while steel tire production was relatively more resilient. However, overall end-user demand has yet to show a sufficiently strong surge.
In other words, rubber prices have risen faster than demand's ability to absorb the increase.
This is important. If raw-material prices remain high while tire sales fail to increase significantly, tire manufacturers are more likely to hold back purchases and reduce inventories. Such conditions could limit the upside potential for rubber prices.
SICOM-TSR20: Prices Are Approaching a Key Support Zone
From a technical perspective, the 233–235 cents/kg area has now become a very important zone.
Interestingly, SICOM trading data show that prices had previously traded around 232.8 cents on September 2–3, before surging toward 249.9 cents.
With prices at 234.8 cents this afternoon, the market has effectively returned close to that area.
If the 233–235 cent zone holds and buying interest returns, the correction could begin to ease, creating room for a technical rebound, or a recovery following a relatively deep decline.
Conversely, if 232–233 cents is broken amid strong selling pressure, the next downside target could open toward the 230-cent area, or potentially even lower if profit taking becomes more aggressive.
For today's session, the 233–235 cent area is the key downside level to watch.
Price Outlook
Considering the two consecutive sessions of decline, profit-taking momentum still appears fairly strong. There is not yet sufficient evidence from the available price data to conclude that buyers have convincingly regained control.
However, the closer prices move toward the 233–235 cent area, the greater the possibility of technical buying emerging.
Technical outlook — not a price certainty:
Nearest support: 233–235 cents/kg
If support breaks: around 230 cents/kg
First upside resistance: 238–240 cents/kg
Next upside resistance: 243–245 cents/kg
If prices can hold around 233–235 cents, the possibility of a technical rebound remains open. However, if that zone is decisively breached, the correction could extend toward around 230 cents/kg.
Disclaimer: The technical outlook above is based on price patterns and historical data and does not guarantee the market direction. Commodity prices can change rapidly due to weather conditions, exchange rates, crude oil prices, speculative positioning, production data, and developments in demand.
Conclusion: The Broader Trend Remains Intact, but the Correction Is Not Yet Over
The September 15 correction in SICOM-TSR20 is better interpreted as a correction within a broader uptrend that had previously advanced very rapidly, rather than as an immediate sign that the bullish trend has ended.
Medium-term fundamentals continue to have some support from El Niño risks, dry weather, potential production disruptions, and supply concerns. However, short-term fundamentals have yet to show a sufficiently severe supply shortage to justify uninterrupted price gains.
The market is therefore entering an important phase: is this correction simply profit taking following the rally, or will it develop into a trend reversal?
The answer will likely depend heavily on the market's ability to hold around 233–235 cents/kg. If this area holds, the correction could begin to lose momentum. But if the level breaks, the market could continue lower and test the 230-cent area.
For now, profit taking remains dominant and the pressure is still fairly strong. There is not yet enough evidence that a rebound has been established. Market participants should therefore avoid concluding too quickly that prices have reached a bottom simply because the decline has lasted several sessions.
The key focus going forward is the price reaction around 233–235 cents/kg. Holding this area would be an early signal that selling pressure is beginning to weaken. Conversely, a downside break would indicate that the correction still has room to continue.