China launches TSR20 futures trading

Shanghai, China – The Shanghai International Energy Exchange (INE) has started the trading of yuan-denominated TSR20 futures (Technically Specified Rubber), which is open to overseas investors.

The mostly traded front-month contract NR2002, for delivery in February 2020, opened at Yuan9,260 and closed 6.6% higher at Yuan9,875 at the end of the first trading day on 12 Aug.

“Given the huge NR market in China, the listing of TSR20 futures is beneficial to the establishment of a pricing system in the global NR market, as well as to the development of China’s rubber industry,” INE said in a Q&A published ahead of trading.

The move, said INE, will “accelerate the upgrading of China’s tire manufacturing industry”, and help promote the opening-up of China’s futures.

According to INE, in 2018, the global output of TSR20 has exceeded 8.7 million tonnes, of which Thailand, Indonesia and Malaysia are the main contributors, accounting for 70% of the total.

About 70% of the world's natural rubber is used in tire manufacturing, of which about 80% is TSR20, said the INE Q&A.

In 2018, the global consumption of TSR20 was nearly 8.3 million tonnes.

China, Europe, India, East Asia and the US accounted for about 50%, 10%, 7%, 9% and 8% of the total consumption respectively.