Derived from the sap of rubber trees, Rubber possesses unique properties such as elasticity, durability, and water resistance. It is predominantly used in tire manufacturing, making it essential for the automotive industry and various other sectors, highlighting its adaptability and versatility.
According to a report by Precision Milestone Reports, the global rubber market size is estimated to be worth USD 46,610 million in 2024. Due to its extensive applications, rubber futures are among the most actively traded futures contracts in the global commodity market.
Find out 6 Things to Take Note When Trading Rubber Futures and 4 Important Factors When Trading INE China Rubber Futures.
This article aims to explore the outlook for rubber futures in 2024, examining whether SGX rubber futures prices will rise in the year ahead.
Where are Rubber Futures Traded?
Due to its popularity, Rubber Futures are traded on several different Exchanges. Traders can trade Rubber Futures from Singapore Exchange (SGX), Shanghai International Energy Exchange (INE), and Osaka Exchange Incorporated (JPX) 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 contracts, JPX offers Rubber RSS3 Futures, and SGX offers both SICOM RSS3 and TSR20. Traders can also capitalize on rubber cross-arbitrage, capitalizing on the price differences of rubber from different markets.
About Rubber Cross-Arbitrage
Cross arbitrage involves the Import and export trading of spot goods. When a significant price difference occurs, traders will take this opportunity to make profits by importing and exporting. This large volume of movements will then rebalance the prices of both products back into equilibrium.
Cross Arbitrage opportunities are usually used for futures as the response time is faster and it is easier to apply the strategy. It is also important to note that arbitrage strategies are usually done where delivery bids are similar and where the price movements of futures contracts in different markets have a very strong correlation.
The location of the exchange can also affect the proportion of investments. Factors that can affect arbitrage include:
- Differences in contract size
- Currencies
- Change in tax rate
- Policies on domestic storage, customs policy adjustment, and industry policy changes
These factors will cause price differences amongst different exchanges in different countries. Cross-Arbitrage also works for other Futures contracts such as Refined Copper Arbitrage Trading and more.
SGX Rubber Futures Contract Specifications
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
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 Futures Market News
Rubber Futures Prices
According to Brecorder, JPX Rubber Futures price has an increase of 2.11%, up 5.5 yen to 266.1 yen ($1.83) per kg. This marks the highest closing price since 29th November 2023.
SHFE Shanghai Futures Exchange Rubber Futures SHFE also experienced a rise of 45 yuan, closing at 13,785 yuan ($1,922) per metric ton. Meanwhile, SGX RSS3 Rubber Price also garner a 0.72$ increase, trading at 154.10 US cents per kg.
Rubber Supply and Demand
Brecorder reported that the Thai Meteorological Department has issued warnings of thundershowers in Northern regions from Jan. 15-17 and heavy rains in Southern areas from Jan. 15-18, potentially impacting the supply of natural rubber.
Volkswagen reported increased sales in the previous year, driven by mass-market cars and the premium brand Audi, which surpassed pre-pandemic deliveries at 1.9 million vehicles. Porsche also achieved a new record in 2023 retail deliveries in the United States, totaling 75,415 cars, a 7.6% increase from 2022.
European Commission investigators plan to inspect Chinese automakers as part of an inquiry into whether to impose punitive tariffs to protect European electric vehicle makers.
Japanese firms in China anticipate challenging economic conditions in China for the current year. According to a Reuters poll, China's economic growth is expected to slow to 4.6% in 2024 and 4.5% in 2025.
2024 Future of Rubber Outlook
According to Trading Economics, Rubber is projected to trade at 157.97 US cents per kg by the end of this quarter, reflecting a slight increase from the current price of 154.10 US cents per kg. Looking ahead, it is estimated to reach 164.37 US cents per kg in 12 months' time.
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 bespoke services to our professional clients, tailored to their corporate and individual needs. 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.
