TSR 20 Rubber Futures to Be Launched on SHFE on August 12, 2019
On July 5, Chang Depeng, news spokesman of China Securities Regulatory Commission (CSRC) said that CSRC had already approved the launch of technically specified rubber (TSR) 20 futures on the exchange on August 12, 2019.
The Shanghai Futures Exchange (SHFE) is exploring ways to open up its non-ferrous metal futures contracts to foreign investors and has decided to take another significant step on August 12, 2019.
Opening up SHFE’s non-ferrous markets will be an exciting development for traders and help China’s ambitions of developing benchmark contracts, said Jeremy Goldwyn, Managing Director at commodities broker BANDS Financial Ltd.
TSR20 would be the second Shanghai commodities futures to be opened to international investors after crude oil.
After the TSR 20 rubber futures is launched on the SHFE, the unique delivery property of SCRWF will disappear. Therefore, the futures price will be close to the spot price before the delivery date. The price spread between futures and spot goods will decline noticeably, and like others, it will only widen in rare occasions.
From the perspective of industrial chain, above 70% of NR output is used for the tire manufacturing, and 80% of the tire manufacturers use TSR 20 rubber. The launch of TSR 20 rubber futures on the SHFE will motivate the tire manufacturers to actively participate in hedging activities, providing them with another effective tool for risk control.
TSR 20 rubber has been the most matured rubber product by far. Now, TSR 20 rubber futures contract is being traded in Japan and Singapore. Its launch on the SHFE will make it the second underlying asset, among rubber products, to be delivered in China, Japan and Singapore. This will inject new vitality into the market.
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