SGX SICOM Rubber Report - March 2016
OREANDA-NEWS. Benchmarks SICOM TSR 20 and SICOM RSS 3 averaged US$1.288/kg and US$1.449/kg in March, increasing a strong 18% and 27% from a month ago respectively. March was a good month for the commodity complex, and rubber prices outperformed its commodity peers.
Concerns of supply tightening, and to some extent a weakening dollar, have lifted the rubber market. Thailand is in the wintering season, Northern Malaysia is experiencing a hot and cold spell brought on by El Nino, and the regional farmers are tapping less in response to the poor economics. Thailand, Malaysia and Indonesia have also agreed to cut exports by 15% for a period of six months.
SGX SICOM rubber futures volumes traded a record of 106,181 contracts (530,905MT) in March amid high volatility in the market. Daily average volume reached 4,826 lots, also a record high. Combined open interest ended March at 37,093 contracts (181,635MT), increasing 2% m-o-m and 18% y-o-y.
Consolidation is taking place among the rubber producers. Sinochem International is acquiring Halcyon Agri and merging it with GMG Global. Sri Trang Agro-Industry has also increased its stake in Thaitech Rubber and will be taking active roles in managing its business and operation. Both Halcyon Ari and Sri Trang Agro-Industry are listed on the SGX.