Rubber Prices Rebound for Second Day, TSR20 Nears 245 Cents—Can It Break 250?

Supply remains supportive, but China’s demand and trading volume continue to limit the upside

Natural rubber prices moved higher again in Wednesday morning trading, September 23, 2026, extending the rebound that has now lasted for two sessions. As of around 09:31 WIB, the SICOM-TSR20 October contract stood at 244.3 US cents/kg, up 2.6 cents, or approximately 1.08%.

The gain extended the recovery from 238.0 cents/kg on September 21 to 241.7 cents/kg on September 22 and then to 244.3 cents/kg this morning. This means TSR20 has gained approximately 2.65% over the past two sessions.

The move indicates that the selling pressure that had previously weighed on prices is beginning to ease. However, a two-session rebound does not automatically signal the formation of a strong new uptrend. Prices still need to clear several important levels to confirm that buying interest is becoming dominant again.

Supply Remains a Key Support

From a fundamental perspective, the rubber market continues to receive support from supply-side concerns. Recent industry data indicate that global natural rubber production in July 2026 declined compared with the same period a year earlier.

For January–July 2026, global natural rubber production was estimated at around 5.56 million tonnes, down approximately 1.18% from the same period last year.

Weather conditions also remain a concern. The rainy season in several Southeast Asian producing regions is expected to be delayed, while the El Niño phenomenon could maintain drier conditions in some areas through the end of the year and into early 2027.

For the rubber market, these conditions are important because weather changes can affect tapping activity, latex production, and the supply of raw materials to processing plants.

However, the impact of weather on prices needs to be viewed carefully. If weather conditions improve and production activity returns to normal, part of the supply-risk premium could fade.

Inventories Begin to Decline

Inventory data are also providing support for prices.

Natural rubber inventories in the Qingdao area for the week of September 18 stood at approximately 585,300 tonnes, down from around 603,200 tonnes the previous week.

The decline indicates that available physical rubber supplies at one of China’s major trading and storage hubs are beginning to decrease.

This is one of the factors preventing rubber prices from falling much further following the previous selling pressure.

However, declining inventories alone are not enough to eliminate concerns over demand. The market still needs evidence that end-user consumption, particularly from the tire industry, can absorb supply on a sustained basis.

China Demand Remains a Drag

Meanwhile, China’s downstream sector continues to show mixed conditions.

Operating rates at Chinese all-steel and semi-steel tire factories during the week of September 17 were around 59.89% and 64.94%, respectively. Both rates declined and remained below the levels recorded during the same period last year.

China’s tire production in August reached approximately 103.46 million units, down slightly by around 0.3% year-on-year. However, cumulative January–August production still increased by around 1.5%, reaching more than 811 million units.

Therefore, rubber demand cannot be described as entirely weak. Tire factories are still operating, but growth has not been strong enough to provide a major boost to prices.

China’s automotive sector is showing a similar pattern. Vehicle production and sales in August increased compared with July, but remained lower than a year earlier. At the same time, Chinese vehicle exports continued to show strong growth.

This means that automotive activity is still supporting rubber consumption, but weaker domestic demand in China remains one of the factors limiting the upside in prices.

Holiday Period Could Reduce Market Activity

Another factor to watch is the upcoming holiday period in China.

Ahead of the Mid-Autumn Festival and National Day holidays, some market participants tend to reduce positions and adjust inventories. Some tire factories may also temporarily reduce or suspend production.

Such conditions could lead to lower trading activity and weaker physical demand in the short term.

Therefore, the current price increase is more appropriately viewed as a combination of easing profit-taking, supply-side support, declining inventories, and a technical recovery.

It is not yet strong enough to conclude that the market has entered a new bullish phase.

Can Prices Reach 250 Cents?

From a technical perspective, the current level of 244.3 cents/kg is approaching an important resistance area.

The 245 cents/kg area is the first level to watch. If prices can break above 245 and hold there, attention would shift toward 248–250 cents/kg.

The 250 cents/kg area is particularly important because prices previously approached that level before undergoing a sharp correction.

If 250 is successfully broken and prices can hold above it, the next technical upside area could open toward approximately 252–255 cents/kg.

Conversely, if prices once again fail to break through 245–248, further consolidation remains possible.

On the downside, 242 cents/kg represents the nearest support. Below that are the 240 cents/kg area, followed by 238–236 cents/kg.

At the current level, as long as TSR20 remains above 240–242 cents/kg, the short-term rebound structure remains relatively intact.

Volume Has Yet to Provide Strong Confirmation

In this morning’s monitoring, volume for the October contract was around 232. This has not yet provided strong confirmation that the price increase is being supported by significantly higher trading activity.

Therefore, the market needs to show whether the rally can continue with increasing volume and whether prices can remain above resistance levels.

If prices rise while trading activity remains relatively thin, the risk of a rapid reversal remains a factor to consider.

Is Profit-Taking Over?

Profit-taking pressure appears to have eased following the correction from around the 250 cents/kg area toward 236–238 cents/kg.

However, there is still no certainty that all selling pressure has ended.

Investors who entered at lower prices still have room to realize gains as prices approach resistance. This could make the 245–250 area an active trading zone.

Therefore, the two-session rise is better viewed as a rebound that is still being tested, rather than definitive confirmation of a trend reversal.

Outlook for Today

For today’s trading session, the 245 cents/kg area will be the first key level to watch.

If prices break above and hold 245, the opportunity to test 248–250 cents/kg becomes increasingly open. A break above 250 accompanied by stronger volume would provide a more constructive signal for the next move.

Conversely, if prices are once again rejected around 245–248 and then fall below 242, the rebound could lose momentum, potentially sending the market back toward the 240–238 cents/kg area.

Under current fundamental conditions, a move toward 250 cents/kg remains possible, but the path is not without obstacles. Relatively tight supply and weather risks provide support, while still-soft China demand, weaker tire-industry activity ahead of the holidays, and potential profit-taking remain limiting factors.

Note: The technical analysis above is an estimate based on price movements and data available at the time of monitoring and does not represent a certainty regarding future price direction. Actual movements may change in response to trading volume, market sentiment, fundamental data, exchange rates, oil prices, and developments in global supply and demand.