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RUBBER NEWS INT'L: Tokyo commodity exchange adds another rubber listing
(Last Updated: 10 Oct 2018)



Tokyo commodity exchange adds another rubber listing

TOKYO — The Tokyo Commodity Exchange on Tuesday listed a second natural product in an effort to lure Chinese and  traders and investors.

Tokyo commodity exchange adds another rubber listingA rubber market in Thailand: Tokyo’s commodity exchange hopes that by listing a second type of , it can lure Thai producers and Chinese buyers to its bourse.   © Reuters

Ribbed smoked sheet, or RSS, rubber is already the fourth most traded commodity on Tocom, behind gold, crude  and platinum. The sheetlike, handmade natural rubber product accounted for 9% of all trading in 2017.

Now Tocom has listed technically specified rubber, or TSR. The machine-produced product is cheaper and of higher quality than RSS.


By listing TSR, Tocom hopes to catch up to the Singapore Exchange, which trades both kinds of rubber. It expects the move to draw trading from Thailand, the world’s largest , and China, the world’s largest natural rubber consumer.

Natural rubber futures markets are used to hedge against price fluctuations.

Japan’s TSR imports surpassed those of RSS in 2002. In 2017, TSR accounted for 80% for Japan’s natural rubber imports.

“Chinese traders and investors have shown an interest in Tocom-offered TSR futures,” said Hideshi Matsunaga of Sunward Trading in Tokyo.

Many Japanese tire makers, however, source their natural rubber directly from plantations and producers with which they have long-term contracts. This way, the rubber they obtain is easily traceable.

 has no plans to trade in futures,” a company representative said.

Although Tocom has big hopes for TSR, it is unclear how much its rubber futures trading will expand, said  of the Rakuten Securities Economic Research Institute.

“With two listed products, it could result in market players’ dispersion and lower trading volume,” said Tsutomu Kosuge of Marketedge in Tokyo.

Meanwhile, Tocom President Takamichi Hamada is pinning his hopes on an increase in arbitrage trading. He said the amount of TSR in circulation has increased to nearly four times that of RSS.

“Natural rubber is the longest-established product on Tocom,” he said, “and we will continue to support industrial infrastructure.”

SGX-listed TSR is the benchmark for Indonesian natural rubber. “We hope Thai rubber producers and exporters will use our TSR prices as their benchmark,” Hamada said. “We can also expect arbitrage trading utilizing the price difference with the Shanghai and Singapore bourses.

“An increase in arbitrage trading will boost Tocom’s internationalization. We will also start dollar-denominated off-floor trading to meet strong demand. I think the service will gradually be accepted by customers,” Hamada said.



TOCOM to List Technically Specified Rubber (TSR) Futures on October 9


The , Inc. (TOCOM) has scheduled the listing of Technically Specified Rubber (TSR) futures contracts for October 9, 2018, pending regulatory approval from the Minister of Agriculture, Forestry and Fisheries and the Minister of Economy, Trade and Industry.

TOCOM to List Technically Specified Rubber (TSR) Futures on October 9

TSR is a class of natural rubber and, along with Ribbed Smoked Sheet (), are key components in automobile  production. In recent years, TSR has exceeded RSS in both production and consumption. RSS has traded at TOCOM for many decades.

Adding TOCOM TSR futures to trade alongside RSS is a response to changing market demand. The Exchange continually looks to improve its Rubber market and expand its presence around the world.


TSR Futures Contract Specifications (tentative)    

Type of Trade Physically Delivered Futures Transaction
Standard STR20 (Standard  20), which is TSR20 manufactured at TOCOM approved factories in a TOCOM designated country of production, Thailand, in conformity to its standards
Consecutive – six months
Contract Unit 5,000kg / contract
Delivery Unit 20,000 kg / contract (Equivalent of 4 contract units)
Price Increment JPY 0.1 per kg
Trading Hours Day Session: 8:45 a.m. – 3:15 p.m. (JST)
Night Session: 4:30 p.m. – 7:00 p.m. (JST)
Last Trading Day of the Current Contract Month The last business day of the month prior to the current contract month
Delivery Dayand Time The shipment shall be executed between the tenth business day of the current contract month and the fifteenth day of the following month, and delivery shall be conducted until the ninth business day of the shipment.
Delivery Points Buyer-designated vessel in the ports of Bangkok, Laem Chabang (Thailand)  or Penang (Malaysia)
Delivery Method FOB (Free on Board) on a buyer-designated vessel

Rubber still performing amid lower prices

Malaysia’s natural rubber (NR) production in 2017 reached 740,140 tonnes, an increase of 10% year-on- year, despite the downtrend in prices particularly from June 2017 onwards.

Primary Industries Minister Teresa Kok Suh Sim said the rubber industry in Malaysia has transformed and shifted its focus to downstream activities, particularly on manufacturing high-end innovative products.

“The rubber industry contributed RM32.3 billion in export earnings in 2017, an increase of RM7.5 billion from the previous year.  was attributed to a firm demand for  globally,” she told reporters at the National Rubber  Conference (NREC) 2018 in  yesterday.

NR and other rubber accounted for RM10.5 billion of total exports, while rubber products contributed RM21.8 billion.

Kok added that the success of the industry is a result of extensive research and development (R&D) activities, which in turn has increased productivity, as well as resulted in new technologies that improve processes.

“It has provided vast opportunities, especially in the manufacturing of high-value added automotive and engineering components, as well as created additional employment to over 75,000 people in 2017,” she said.

Kok said the recent trip with Prime Minister () Tun Dr Mahathir Mohamad proved to be very successful as a memorandum of understanding (MoU) was inked between the Malaysian  (MRB) and Hainan State Farms Investment Holdings Group Co Ltd, to collaborate and adopt rubberised bitumen road technology.

“They were very impressed with our technology, our scientist was invited to do R&D on rubber tapping and autonomous.

“What we have can be commercialised. It is a good path into the Chinese market. They do not have much rubber trees as well,” she said.

However, Kok said she is disappointed with some government agencies that do not really value the rubber innovations or products from local R&D, and not interested in pushing the goods into other intra projects.

She urged the agencies to come up with a directive, especially in procurement processes.

“Please use Malaysian-made products. It does not make sense that we are able to export rubber products like gloves to so many other countries, but our own people do not use them.

“We must use our own resource-based products. We can’t push it out or sell it as a commodity anymore, we have to turn it into value-added products.

“When we start using our own-made products, this will not only increase domestic consumption, but also uplift the income of smallholders and the industry as a whole,” Kok said.

Almost 93% of the NR production is contributed by half a million rubber smallholders, who play a crucial role in continuing the supply of NR for the industry.

MRB DG Datuk Dr Zairossani Mohd Nor said the government will remain committed in encouraging smallholders to continue tapping during periods of low rubber prices through the  Incentive (IPG) programme.

“To ensure supply and sustain minimum income , the government through MRB will continue the incentives through the IPG. If the rubber price falls, the government will top it up, so they will receive a minimum income,” he said.

He added that the subsidies will depend largely on the price of rubber and is not only for NR, but also for the production of latex.

“There are two types of raw material: The solid rubber material and latex. For rubber, it’s usually about 30 sen or 40 sen per kilo and that depends on the price of rubber, but for latex, it is fixed at 90 sen per kilo.

“That’s why we are currently encouraging more smallholders to produce more latex. Currently, it can only accommodate about 10% of the latex industry requirement for now,” Zairossani said.

Meanwhile, the NREC 2018 themed “Disruptive Trends: Innovate and Evolve”, is envisioned to be a platform for participants to discuss ideas and share knowledge on topics related to the emerging trends in the rubber industry.

Myanmar: Rubber exports rise, but production yield still not optimal

 Myanmar is expected to export over 150,000 tonnes of  this fiscal year on the back of rising international demand and higher domestic production levels, U Khaing Myint, secretary of Myanmar  Planters and Producers’ Association, told The Myanmar Times.

Around 140,000 tonnes of rubber was exported in the previous fiscal year.

Currently, there are more than 750,000 acres of rubber plantations in the country  are grown mainly in Mon State, Tanintharyi Region, Karen State, Yangon and Bago, according to the Myanmar Rubber Planters and Producers’ Association (MRPPA).

Myanmar produces RSS3, RSS1- rubber and mostly exports RSS3. Around 70 percent of locally produced rubber is exported to China while the remaining is exported to , Malaysia, Indonesia, Korea,  and Japan, according to the MRPPA.


In this fiscal year, one pound of RSS3 rubber was exported for K850. Prices have now fallen to  to K780 a pound, said U Khaing Myint. The price of rubber is expected to rise further, buoyed by world rubber prices and the rising value of the dollar.

Rubber is included as a priority product under the National Export Strategy. Despite rising export volumes though, U Khaing Myint said current  levels are less than optimal.

This is because yields are low relative to acreage and compared to neighbouring countries.

According to U Khaing Myint, the average rubber yield per acre per year in Myanmar is around 700 pounds compared to an average of 1000 pounds – 1600 pounds in and up to 1800 pounds in India.

“As such, the rubber production levels of Myanmar is only half that of other rubber producing countries. This is because Myanmar is using the wrong type of seeds,” he said.

“In Myanmar, rubber cultivators are using rubber seeds which can produce a minimum of 500 pound to a maximum of 1000 pounds per acre per year, so the average yield is just 700 pounds. Growers should plant the seeds that yield more rubber to raise production,” he said.

That’s easier said than done though. “Small-scale planters can’t afford to change seeds and so  isn’t possible at all for them to cut down their current trees and grow new ones,” U Khaing Myint said.

For these growers to change to high-yield rubber seeds, capital injection from investors will be needed.

Shortages, price increases likely after EU tariffs on Chinese truck, bus tires

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 COLOGNE, Germany—Europe's truck and bus tire market is likely to see shortages and face increased prices into early next year as a direct result of the European Union's recent imposition of provisional tariffs on Chinese tires.

"With the anti-dumping tariff situation that we have right now, a lot of the orders in the last quarter have stopped," Stephan Helm, chairman of German tire retail trades association the BRV, said at the Future Tire Conference, held May 30-31 in Cologne.

Helm, who also is managing director of the Reifen Helm Group, expects the shortages to show up in third and fourth quarters this year. He also believes the shortages would impact both the budget and premium brands.

Low-cost Chinese tire imports have had the greatest impacted the retreading industry, which Helm said has seen an almost one-on-one relationship between increases in Chinese tire imports and decreases in the retreading market for EU suppliers.

"We are expecting