Rubber futures contracts are typically traded on the Tokyo Commodities Exchange. Asia’s economies are among the world’s largest producers of rubber, with China, Malaysia, Indonesia, and Thailand being the most important. Futures contract prices on the TOCOM exchange are priced in the yen currency. This means that variations in the dollar can affect the return on an investment for a US investor or trader. If the value of the dollar falls, rubber products become more expensive in yen terms.
Can I make a rubber investment?
The rubber industry is one of the most profitable natural resource enterprises on the planet. Rubber is used in a variety of applications, including vehicle parts, tires, footwear, latex products, pharmaceuticals, textiles, and cables and wires. Rubber is manufactured in a few nations, with Thailand, Indonesia, and Malaysia accounting for about 94 percent of global production. You can invest directly in industries that deal with natural rubber processing or rubber-based product manufacturing as an investor. You can also invest in rubber stocks if you choose.
I’m looking for a place to trade rubber futures.
The Tokyo Commodity Exchange (TOCOM) and the Malaysian Rubber Exchange both provide rubber futures for trade. Natural rubber has a high tensile strength, is exceptionally waterproof, and is flexible.
Is it possible to trade rubber futures?
Market participants can trade in rubber of the ‘Ribbed Smoked Sheets4 (RSS4)’ quality for a minimum lot size of 1 MT through the futures contract. Rubber futures are contracts with a mandatory delivery logic. “At the end of the contract month, on the last business day, they’d be settled.”
How do you go about trading rubber?
These financial products, like stocks, are traded on exchanges as shares. There is no ETF that provides pure-play rubber price exposure.
The ELEMENTS Rogers International Commodity Agricultural ETN (NYSEARCA:RJA) on the other hand, holds various agricultural commodities in its portfolio, including rubber.
Contracts for Difference (CFDs)
The use of a contract for difference (CFD) derivative instrument is one approach to trade rubber. Traders can speculate on the price of rubber using CFDs. The difference between the price of rubber at the time of purchase and its current price is the value of a CFD.
Is it possible to buy rubber as a commodity?
Rubber as a commodity has a wide range of applications. It’s used in the production of tires and tubes, rubber gloves, latex condoms, erasers, adhesives and coatings, nozzles, and elastic garment material, among other things. As a result of its diverse applications in everyday things, rubber is a valuable commodity.
Is rubber a commodity?
Rubber and its derivatives are traded on a variety of commodities markets all around the world. The Tokyo Commodity Exchange, Osaka Mercantile Exchange, and Singapore Commodity Exchange are the three primary rubber derivative exchanges in Asia.
Rubber is mostly traded physically on exchanges in New York (NYMEX), London, and Kuala Lumpur.
Price Factors
Rubber prices are impacted by a variety of factors. Weather conditions can have a significant impact on rubber prices. Natural rubber manufacturing necessitates particularly specific conditions, and changes in these can have a significant impact on the commodity’s supply.
Rubber is consumed by the automobile industry to the tune of 70% of global demand. As a result, falling car sales and production are a major influence in lower rubber demand. Predicting the rubber demand of the automobile sector can help predict future rubber prices.
China’s and India’s robust and steady industrialization are important contributors to the rising demand for rubber. These countries’ heavy industries demand massive amounts of rubber, which manufacturers struggle to meet. Producers are expanding their capacity to meet the increased demand, but it will take time. Meanwhile, the scarcity will drive prices even higher.
TOCOM Rubber Futures Contract
The underlying rubber type for the TOCOM Rubber Futures Contract on the Tokyo Commodity Exchange is Ribbed Smoked Sheet (RSS) No. 3. The following are the specifics of a single contract:
What does a kilo of rubber cost?
In Manila and Quezon, a kilo of natural rubber costs roughly USD 2.37, packed and ready for export. In PHP currency, the price is 0.0490353.
Are rubber prices on the rise?
Rubber prices have been steadily rising, nearly tripling last year, and are now hovering around Rs 180 per kilogram in Indian marketplaces. Rubber prices have been supported by strong demand from tyre makers, non-tyre makers, and domestic stockists.
Where can I get rubber stocks?
Corporations that want to participate in rubber processing can put up a significant amount of capital or cash. Average investors, on the other hand, can look to investment items in the securities market, such as commodities, stocks, or futures, to receive some portfolio exposure to financial gains in the rubber industry. A single trader can purchase shares in rubber-related companies or trade rubber commodities on the futures market.