(Yicai) Aug. 21 -- The Shanghai International Energy Exchange has successfully completed its first physical delivery of rubber overseas through a futures contract, a development that is expected to increase China's influence in international pricing.

The Shanghai Futures Exchange, the SIEE’s parent, announced the transaction today. Media reports said 600 tons of TSR20 rubber, worth CNY8.84 million, was sold via the overseas delivery warehouse operator Taihua Rubber. It will be delivered at Laem Chabang Port in Thailand.

A range of Chinese and international companies have signed up to participate in the TSR20 rubber futures overseas delivery business, including China Petroleum International and InTop International Singapore, a wholesale trader.

Subsequent rubber shipments are expected to take two main distribution paths, with one part shipped back to China, cleared through customs, and delivered to tire manufacturers, and the other resold to overseas tire factories as offshore cargo, thereby entering consumer markets abroad.

Industry insiders said the launch of cross-border deliveries of TSR20 rubber futures shows that overseas delivery fulfilment warehousing has been successfully established, embedding China’s futures market infrastructure into global commodity trading networks. 

This will expand the depth and breadth of delivery services and attract more industrial customers to participate in the Chinese futures market, including international producers and traders, they said. It will also enhance the recognition and influence of "Chinese prices" in global trade.

The cross-border delivery mechanism is expected to encourage more foreign companies to use Chinese futures prices in international trade, effectively managing operational risks while further strengthening the resource optimization and risk management functions of China’s futures market.

An SIIE official said efforts will focus on expanding the practical uses of overseas standard warehouse warrants and the delivery network’s coverage, as well as improving the futures market's ability to serve the real economy, contributing to Shanghai’s broader goal of becoming a leading international financial center.

Editor: Tom Litting