Natural rubber-trading—a $50 billion market in 2013—has historically centered around Asia Pacific, which constitutes 70 percent of global natural rubber consumption, with the ASEAN region alone accounting for 75 percent of global production and 87 percent of global exports in 2013.
This report highlights the main dynamics of natural rubber trading markets and how this is leading buyers and sellers to re-engineer their commercial strategies and invest in procurement, marketing and risk management capabilities, which, in turn, will allow them to optimize manufacturing or production integrated margins.
The central role played by Asian Commodity Exchanges such as SGX-SICOM and TOCOM in facilitating the rubber trade has been investigated in depth to understand the implications of liquidity, volatility and relative pricing dynamics on buyers and sellers’ respective purchases and sales.
As producers struggle with the on-going over-supply situation and end-buyers try to mitigate resilient price volatility, market players will be looking at opportunities to protect their margins through enhanced trading and risk management techniques. This report highlights strategic initiatives around portfolio structuring, hedging and operating capabilities that can deliver incremental earnings from active participation in the rubber trading market.