Rubber Prices Correct Sharply, SICOM-TSR20 Falls to 245 US Cents/kg — Profit Taking Returns
MEDAN, September 29, 2026 — Natural rubber prices came under renewed pressure in Tuesday's trading session (September 29, 2026). After posting a sharp rally over the previous several sessions, the market has now entered a correction phase, with losses becoming increasingly significant.
As of 3:03 p.m. WIB, the October SICOM-TSR20 contract stood at 245 US cents/kg, down 7.4 cents, or approximately 2.93 percent. Meanwhile, the January 2027 RSS3 (RU) natural rubber contract on the Shanghai Futures Exchange (SHFE) stood at 19,010 yuan per metric ton, down 445 yuan, or 2.29 percent.
The decline indicates renewed selling pressure after prices reached 256.20 cents/kg on September 25. On September 28, SICOM-TSR20 was still at 252.40 cents/kg.
As a result, from the September 25 peak to this afternoon's level, SICOM-TSR20 has corrected by approximately 9.6 cents, or 3.75 percent.
Correction After a Prolonged Rally
The September price movement shows that the market had experienced a very rapid increase.
SICOM-TSR20 moved from 236.0 cents/kg on September 14 to 254.0 cents on September 24, before reaching 256.20 cents on September 25.
The rally pushed prices significantly above the trading levels seen during most of the preceding period. As a result, once upward momentum began to weaken, market participants who had accumulated profits had room to engage in profit taking, or realize their gains.
This is one of the most plausible explanations for the renewed selling pressure seen today.
However, profit taking is not the only factor behind the correction. The market is also facing short-term demand pressure, particularly from China.
China's Demand Becomes a Short-Term Drag
Entering the end of September, China's tyre industry is facing a period of lower activity ahead of the country's long holiday period.
Data from the China Natural Rubber Association indicate that domestic tyre demand has not strengthened as strongly as normally expected during the "busy September" period. By mid-September, operating rates for all-steel tyres were still around 58 percent, while passenger-car tyre operating rates were around 65 percent. Several tyre manufacturers have also scheduled production stoppages and maintenance during the Mid-Autumn Festival and National Day holiday period.
This situation puts pressure on rubber because a large proportion of natural rubber demand is linked to the tyre industry.
In other words, when tyre factories reduce their operating rates, their short-term need for raw materials also declines.
This is one reason the rubber market has encountered resistance after its extended rally.
Supply Fundamentals Have Not Deteriorated Significantly
Although futures prices have corrected, the underlying supply fundamentals of natural rubber have not suddenly turned negative.
The latest available ANRPC data indicate that global natural rubber production in 2026 is projected at approximately 15.279 million tonnes, an increase of 2.1 percent from 2025. However, monthly production in July 2026 was only 1.321 million tonnes, down 5.15 percent year on year.
Global consumption in 2026 is projected at approximately 15.356 million tonnes, up 0.4 percent. July consumption was around 1.297 million tonnes, increasing 0.8 percent year on year. ANRPC also noted that demand from the tyre and electric-vehicle sectors remains among the factors supporting consumption.
This picture suggests that the rubber market is not currently facing a situation of extremely large oversupply.
Production is expected to increase throughout the year, but that increase is occurring alongside continued consumption growth.
Therefore, the current price correction does not automatically mean that rubber fundamentals have turned bearish.
Qingdao Inventories Continue to Provide Support
Another factor providing support is inventory levels in China.
As of September 27, 2026, total natural rubber inventories in the Qingdao area, including bonded and general-trade inventories, stood at approximately 575,200 tonnes, down 10,100 tonnes, or 1.73 percent, from the previous period.
Bonded inventories declined 3.77 percent to 58,700 tonnes, while general-trade inventories decreased 1.49 percent to 516,500 tonnes.
The decline in inventories does not mean that China is experiencing a shortage of rubber.
However, the data also do not indicate a significant build-up of inventories that would normally create strong downward pressure on prices.
In other words, inventory levels are still providing a cushion against an excessively deep price decline.
Thailand Flooding: There Is an Impact, but It Should Not Be Overstated
Flooding in Thailand has also attracted market attention in recent days.
Heavy rainfall has caused flooding in various parts of Thailand. Thailand's meteorological authorities have previously warned of heavy to very heavy rainfall, including in southern areas, along with the risk of flash floods and overflowing waterways.
By late September, flooding had spread across dozens of provinces, disrupting daily activities and transportation.
However, there is still insufficient evidence to conclude that the flooding has caused major disruption to Thailand's rubber production on a national scale.
This distinction is important because not all areas affected by flooding are major rubber-producing regions.
For the rubber market, the impact of flooding would become more significant if prolonged rain and standing water directly disrupted tapping activities, latex collection, transportation of raw materials, or processing operations in major producing areas.
For now, weather should be viewed more appropriately as a risk to short-term supply flows, rather than evidence that Thailand's overall rubber production has suffered a major decline.
Weather Remains an Important Factor to Monitor
Although it cannot currently be identified as the main cause of today's correction, weather developments across Southeast Asia remain important.
Natural rubber production is highly dependent on tapping conditions. Excessive rainfall can make tapping less efficient and disrupt the transportation of raw materials from plantations to processing facilities.
Conversely, if rainfall begins to decline in producing areas, some supply constraints may gradually ease.
The market is therefore in an interesting position: seasonal supply is beginning to improve, but weather conditions still have the potential to disrupt supply flows.
Raw Material Prices Remain Relatively Firm
Available raw-material price data from Thailand also do not yet indicate significant weakness.
On September 28, raw-material prices in several production areas continued to rise. Field latex was reported at around 82.50 baht/kg, while cup lump was around 76.00 baht/kg.
The increase in raw-material prices indicates that the pressure seen in futures markets has not yet been fully transmitted to the producer and raw-material levels.
There is therefore a divergence between the futures market, which is currently undergoing a correction, and physical-market fundamentals, which remain relatively firm.
Such a divergence means that the correction should be interpreted with caution.
Oil Prices Remain a Supporting Factor
Another factor affecting the rubber market is crude oil prices because synthetic rubber is one of the competing materials used in the tyre industry.
When oil prices rise, the cost of producing synthetic rubber tends to increase, which can provide relative support to natural rubber.
ANRPC's latest report also highlighted high energy-price volatility and geopolitical uncertainty as factors affecting the rubber market in 2026.
However, the oil-price factor has not been sufficient to offset selling pressure while the futures market is undergoing profit taking.
Is This the Beginning of a Trend Reversal?
Not necessarily.
The decline from 256.20 to 246.60 cents/kg is significant enough to be considered a correction, but it is not automatically evidence that the upward trend established since August has ended.
The more important question now is how far the correction extends and whether buyers return at lower price levels.
If prices can find support and move back above 249–250 cents/kg, selling pressure could begin to ease.
Conversely, if 246–247 cents/kg fails to hold, the market could search for a new equilibrium at lower levels.
SICOM-TSR20: Estimated Levels for Today
Based on the available 2026 SICOM-TSR20 price series, several areas deserve attention.
The 249–250 cents/kg area represents the nearest resistance zone. This area previously served as an important trading zone before prices moved higher toward 254–256 cents.
Below the current price, 243–244 cents/kg represents the next important support area.
If selling pressure intensifies and 243 cents/kg fails to hold, the market could potentially move toward 240–241 cents/kg.
Conversely, if a rebound develops and prices move back above 250 cents/kg, the market could recover toward 252–254 cents/kg.
For today's session, with the market at 246.6 cents/kg at 2:25 p.m. WIB, the 243–250 cents/kg range is the key zone to watch.
A technically plausible closing range remains around 244–249 cents/kg, with downside risk toward 240–243 cents/kg if selling pressure increases toward the end of the session.
Meanwhile, if strong buying returns, prices could attempt to recover toward 249–252 cents/kg.
Technical Disclaimer
The levels above represent a simple technical reading based on the available SICOM-TSR20 historical price data and are not a definite forecast or trading recommendation. Commodity prices can change rapidly due to weather conditions, exchange rates, oil prices, trade policies, China's economic conditions, speculative positioning, and developments in regional and global markets.
The Correction Has Not Erased the Supporting Fundamentals
The rubber market on September 29 can be viewed from two sides.
On one side, prices had risen too quickly, making profit taking a natural development. China's short-term demand is also facing pressure from the long holiday period and temporary production stoppages at some tyre factories. These conditions give the market reasons to correct.
On the other hand, supply fundamentals have not undergone a sharply bearish shift. Qingdao inventories have declined, raw-material prices remain relatively firm, and global consumption is still projected to grow in 2026. ANRPC data also indicate that monthly production declines have occurred even as seasonal production recovery is underway.
Therefore, today's SICOM-TSR20 decline is more appropriately viewed as a correction following an extended rally, reinforced by short-term demand weakness, rather than evidence that the entire rubber fundamental picture has suddenly deteriorated.
The market is now entering a more decisive phase.
If the 243–244 cents/kg area holds, the correction could develop into consolidation before the market determines its next direction. However, if that area is broken under strong selling pressure, room for a decline toward 240–241 cents/kg would open.
Conversely, the ability to regain 249–250 cents/kg would provide an early indication that selling pressure is beginning to ease.
In other words, after rallying to 256.20 cents/kg, the rubber market is taking a breather — but there is not yet enough evidence to conclude that the medium-term uptrend has ended.