OSE lists Shanghai natural rubber futures

The listing of Shanghai natural rubber futures on the Osaka Exchange (OSE) in Japan helps to promote China's pricing power in the international market and facilitate the two-way opening-up of the country's financial sector, experts and executives said.

Shanghai rubber futures were listed on the OSE on Monday. The contract refers to the delivery settlement price of natural rubber futures trading at the Shanghai Futures Exchange, which has been specified in the licensing agreement that the two exchanges reached on Jan 15.

The yuan-denominated cash-settled delivery settlement price of the SHFE natural rubber futures serves as the benchmark for the newly launched contract. It has avoided exchange rate conversions and duties deduction calculation.

Yokoyama Ryusuke, president and CEO of OSE, said that the contract has provided more hedging options for industrial clients in Japan and investors around the world, which is inseparable from China's robust growth.

As a substantial step forward for China to advance the opening-up of its futures market, the licensing deal provides more risk management options for companies along the global rubber industrial chain, said SHFE CEO Lu Dongsheng.

Zheng Wenrong, executive vice-president of the China Natural Rubber Association, said that the contract will help the industry cope with price fluctuations and optimize international trade.

As one of the world's four major industrial raw materials alongside crude oil, steel and coal, natural rubber started to trade on the SHFE in 1993. A total of 108 million lots of natural rubber futures were traded on the SHFE in 2024, up 24.1 percent year-on-year. The total trading value spiked 53.4 percent from a year earlier to 17.36 trillion yuan ($2.41 trillion).

The first batch of Shanghai natural rubber futures contracts listed on the OSE were three monthly contracts expiring in September 2025, January 2026 and May 2026 respectively.

The cumulative trading volume reached 322 lots during the first trading day, when holdings came at 152 lots.

It is not the first outbound step made by the SHFE. In September 2020, the SHFE reached an agreement with NOREXECO, a Norwegian marketplace trading pulp and paper futures, to allow the latter to refer to the pulp delivery settlement prices on the SHFE to list futures contracts settled in cash. It is the first direct application of China's pricing in the global futures market.

Experts from Nanhua Futures explained that the authorization of Chinese onshore futures prices in overseas exchanges can help elevate the influence of China's futures prices. Pricing in China can thus become important references in global commodity trading.

Meanwhile, China's futures market can be better aligned with the international market in terms of trading rules, risk management methods and information disclosure. This will help accelerate the internationalization and regulated development of the Chinese futures market, they said.