Rubber is a vital commodity with widespread applications across various industries.
Singapore Exchange (SGX) offers SGX Rubber futures contracts to enable traders to hedge against price volatility and gain exposure to the rubber market.
In this article, we explore the world of SGX rubber futures - Examining the futures contract, rubber price and market outlook.
To find out about the 6 things to note know when trading Rubber Futures, click here.
About Rubber
Derived from the sap of rubber trees, Rubber possesses unique properties such as elasticity, durability, and water resistance. It is most used in the manufacturing of tires, making it essential for the automotive industry. It also finds applications in many industries, showcasing its adaptability and versatility.
According to Yahoo Finance, the industrial rubber products market is expected to exceed US$113.7 Billion in 2023.
Is Rubber a Hard Commodity?
Rubber is categorized as a soft commodity. It derived from agricultural sources like soybeans and corn, which are influenced by factors such as weather conditions, crop yields, and supply-demand dynamics.
Hard commodities encompass natural resources like metals, minerals, and energy resources such as oil and gas.
Types of Rubber
Rubber comes in two primary types – Natural and Synthetic Rubber.
Natural rubber is derived from rubber tree latex. It is known for its elasticity, tear, and heat resistance. Natural rubber is a renewable resource produced in countries like Thailand, Indonesia, and Malaysia. It is ideal for applications such as tire manufacturing and latex products.
Synthetic rubber is created through chemical processes to mimic natural rubber's properties. It offers enhanced chemical resistance and tailored performance characteristics. This makes it widely used in industries like automotive and manufacturing.
Where are Rubber Futures Traded?
Traders can trade Rubber Futures from Singapore Exchange (SGX) and Shanghai International Energy Exchange (INE) through Orient Futures Singapore.
Orient Futures is a futures trading Singapore company and is an indirect subsidiary of Shanghai Orient Futures.
INE offers TSR20 Rubber Futures contract for traders to trade in, whereas SGX offers both SICOM RSS3 and TSR20.
Traders can also profit from rubber cross-arbitrage, capitalizing on price differences between rubber markets.
What is SGX TSR20 Rubber?
SGX TSR20 Rubber is a contract offered by SGX.
TSR stands for Technically Specified Rubber, and the number 20 denotes the specific grade of rubber covered by the contract. TSR20 refers to high-quality natural rubber produced using a standardized manufacturing process.
SGX TSR20 Rubber Contract Specification
The SGX TSR20 Rubber Futures contract follows the following specifications:
The SGX TSR20 Rubber Futures Contract has a minimum price fluctuation of 0.1 USD/kg.
SGX TSR20 Rubber Futures Ticker symbol: TF
What is SGX RSS3 Rubber?
SGX RSS 3 Rubber is a futures contract offered by SGX.
RSS stands for Ribbed Smoked Sheet, which refers to a specific type and grade of natural rubber. RSS 3 rubber is produced by smoking sheets of natural rubber to enhance their strength and quality. It is widely used in various industries, including automotive, construction, and consumer goods.
SGX RSS3 Rubber Contract Specification
The SGX RSS3 Rubber Futures contract follows the following specifications:
The SGX RSS3 Rubber Futures Contract has a minimum price fluctuation of 0.1 USD/kg.
SGX RSS3 Rubber Futures Ticker symbol: RT
SGX Rubber Futures Contract Period
Contract months are monthly all year round, with next consecutive month added upon each month's expiry.
The last trading day of the SGX Rubber Futures contract month is the last day of trading of the month preceding the Delivery Month.
SGX Trading Hours
SGX Trading Hours are as follows:
9:00am - 11:30pm/ 1:30pm – 3:00pm, Beijing Time, Monday to Friday, and other trading hours announced by DCE. (T-session)
Rubber Market News
Supply & Demand
Based on Orient Futures’ Weekly Updates on the Fundamental Data of Chemicals Report dated 10072023, there is a seasonal increase in the production of natural rubber in domestic and foreign rubber plants.
However, the demand for rubber is still weak. The domestic demand in China has shown a weak recovery. In addition, the weakening of external demand has led to overseas goods being sold in domestic market. This causes the port inventory to continue to accumulate.
Our analysts suggest for traders to pay close attention to the implementation of storage policies in the coming weeks.
SICOM Rubber Price
Although the price of Rubber futures increased in the first week of July, the Rubber price is still within the lower range. According to Trading Economics, Rubber Futures decreased to a 17-week low of 129.8 USD Cents/KG. This decline is attributed to lingering concerns about faltering demand from China, which is the top consumer of rubber.
What Is The Forecast For Natural Rubber?
According to Future Market Insights, the future of rubber demand is expected to reach a value of USD $18,270.6 million in 2023. Furthermore, it is projected to grow at a compound annual growth rate (CAGR) of 5.4% from 2023 to 2033.
This growth is primarily driven by the increasing application of natural rubber as an economical and lightweight material across various industries. This includes construction, automotive, textiles, pharmaceuticals, and defense sectors.
By the end of 2033, it is estimated that the consumption of natural rubber will reach a value of USD $30,914.3 million.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us.
We provide premium customer service at an affordable cost to all our clients. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
