Tokyo Commodity Exchange to list technically specified rubber futures

TOKYO—Beginning Oct. 9, the Tokyo Commodity Exchange, Inc. (TOCOM) will be listing technically specified rubber futures contracts, a move that it says comes "in response to changing market demand."

TSR classified natural rubber, like ribbed smoked sheet, serves as a key components in tire production, but the production and consumption of TSR has exceeded that of RSS in recent years, TOCOM said. The hope, it added, is that the rubber market will improve with the listing.

Speaking to European Rubber Journal, a TOCOM spokesman said the listing of TSR is expected to increase the volume of rubber trading significantly at the exchange.

"This listing will increase the convenience of our rubber market for Japan's rubber industry, the world's largest rubber consumer, as well as China and producers in Thailand and Indonesia," Takamichi Hamada, TOCOM CEO and president, said.

The listing is pending regulatory approval from the Japanese minister of agriculture, forestry and fisheries and the minister of economy, trade and industry.

The product type on offer will be Standard Thai Rubber 20 (STR20); It will be manufactured at TOCOM-approved factories in Thailand. The ports of Bangkok; Laem Chabang, Thailand; and Penang , Malaysia, have been designated for the physical delivery of the shipments.

Contract units will be 5,000 kilograms and delivery units will be equivalent to four contract units—20,000 kilograms. The delivery method will be free on board a buyer-designated vessel.

TOCOM has been offering RSS rubber contracts for the past 66 years.

In a Sept. 28 report, Doha-based Gulf Times said TSR production has climbed because of consistency in quality and as low prices discourage RSS output.

Back month rubber prices for RSS3 on TOCOM fell more than 18 percent throughout the first 10 months of the year, closing at $1.49 per kilogram on Oct. 3.