Rubber contracts in Xishangbanna Commodity
Exchange (October 18, 2013.)
Xi Shang Ban Na? It is a place in Yunnan province in
China. An Autonomous Prefecture that kind
of runs its own show and sitting right next to Burma and Laos. Driving distance to Thailand and Vietnam who
are major rubber producing countries.
The Xishangbanna Financial Asset and Commodity
Exchange is owned by Pingan, the second largest insurance company in China. They launched a rubber contract in
September. Physical settled into “SCR WF”
standard which is the same standard used in the very liquid rubber contracts
listed in Shanghai Futures Exchange.
Rubber maybe a lesser popular commodities
for investors but it is the second most traded commodities in Shanghai Future Exchange
after copper in 2012. The volume in
Shanghai is shockingly high relatively to other exchanges. For example, on October 18, 480,000 2014
January Rubber contracts were traded which means CNY 98 billion (USD 16
billion) worth of rubber. The most
liquid rubber contract trading in TOCOM is the 2014 March contract that traded
USD 57.8 million notional on Oct 18.
Xishangbanna Exchange could take advantage
of its location being close to the producers but it is a long way to go in
order to attract the speculators in Shanghai Futures Exchange.
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