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SGX SICOM Rubber Futures
Globally Recognised Benchmark Contracts For Natural Rubber Pricing, Physical Cargo Reference And Price Risk Management Across Global Rubber Markets
Natural rubber is a processed material obtained from the latex of Hevea Brasiliensis trees and may be used to manufacture different grades of rubber. Technically Specified Rubber (TSR) is liquid latex which has been allowed to coagulate naturally and reformed into blocks that can be used in tyre manufacturing. Ribbed Smoked Sheet (RSS) is liquid latex rolled into sheets and put through a smoking process.
Worldwide consumption for natural rubber has increased steadily in the recent decade and the Asian story continues to drive demand for the raw material. The volatility of rubber prices has remained high in recent years due to imbalances in supply and demand caused by rubber’s unique planting and harvesting cycle, changing weather patterns and a constantly evolving consumption trend.
With over 100 years of trading heritage, the Singapore market is recognised as the world’s price discovery centre for natural rubber. SGX offers SICOM Rubber Futures – RSS3 and TSR20 – to provide market participants with a reliable pricing basis as a point of reference to their physical cargo and to manage price risks. SGX remains committed to serve as a pricing benchmark for regional and global producers, traders and consumers.
Key Benefits
- Reliable Pricing Benchmark:
- Provides a reliable pricing basis as a point of reference to physical cargo.
- Recognised as a pricing benchmark for regional and global producers, traders and consumers.
- Price Risk Management:
- Manage price risks arising from supply and demand imbalances.
- Address volatility caused by planting cycles, weather patterns and consumption trends.
- Strong Link To Physical Market:
- Serves as a reference point for physical rubber cargo.
- Reflects supply and demand dynamics across global rubber markets.
- Established Market Heritage:
- Built on over 100 years of trading heritage in Singapore.
- Recognised as part of the world’s price discovery centre for natural rubber.
Technically Specified Rubber (TSR) is liquid latex which has been allowed to coagulate naturally and reformed into blocks that can be used in tyre manufacturing. SGX SICOM TSR20 Rubber Futures provide market participants with a reliable pricing basis as a point of reference to their physical cargo and to manage price risks.
SGX SICOM TSR20 Rubber Options are based on the underlying TSR20 Rubber Futures contract and provide market participants with an additional tool to manage price risks. Both futures and options are linked to the SICOM TSR20 pricing benchmark, which serves as a reference for regional and global producers, traders and consumers.
Ports of Loading for Free-on-Board ("FOB") Delivery Terms
The Port of Loading for a FOB delivery will be solely determined based on the Selling Member’s indicated preference. The list of designated ports and the associated premiums or discounts for the SICOM TSR 20 Rubber Futures Contract are as follows:
| Port of Loading for the re-novated contract | Allocated premium/discount |
|---|---|
| Port of Singapore | Nil |
| Port of Klang | Buying Member entitled to a discount of 1.5 US cents / kg |
| Port of Penang | Buying Member entitled to a discount of 1.5 US cents / kg |
| Port of Bangkok | Buying Member entitled to a discount of 1.5 US cents / kg |
| Port of Laem Chabang | Buying Member entitled to a discount of 1.5 US cents / kg |
| Port of Belawan | Buying Member entitled to a discount of 2.0 US cents / kg |
| Port of Surabaya | Buying Member entitled to a discount of 2.0 US cents / kg |
| Port of Palembang | Buying Member entitled to a discount of 2.5 US cents / kg |
Source: SGX Group
Ribbed Smoked Sheet (RSS) is liquid latex rolled into sheets and put through a smoking process. SGX SICOM RSS3 Rubber Futures provide market participants with a reliable pricing basis as a point of reference to their physical cargo and to manage price risks.
Ports of Loading for Free-on-Board ("FOB") Delivery Terms
The Port of Loading for a FOB delivery will be solely determined based on the Selling Member’s indicated preference. The list of designated ports and the associated premiums or discounts for the SICOM RSS 3 Rubber Futures Contract are as follows:
| Port of Loading for the re-novated contract | Allocated premium/discount |
|---|---|
| Port of Singapore | Nil |
| Port of Penang | Buying Member entitled to a discount of 1.5 US cents / kg |
| Port of Bangkok | Buying Member entitled to a discount of 1.5 US cents / kg |
| Port of Laem Chabang | Buying Member entitled to a discount of 1.5 US cents / kg |
Special Terms and Warehouse Delivery Terms
| Delivery Terms | Allocated premium/discount |
|---|---|
| Special Terms for SICOM RSS 3 Futures Contract | Selling Member entitled to a premium of 1.5 US cent / kg |
| Warehouse Delivery on Standard Terms | Selling Member entitled to a premium of 1.5 US cent / kg |
Source: SGX Group
