The Bohai Commodity Exchange (BOCE) - Rubber Valley Natural Exchange grand opening and Natural Rubber (Rubber Valley) listing ceremony took place in Qingdao, East China's Shandong province, on July 8.

Hui Xin'an (right), Party secretary of Shibei district of Qingdao; and Zheng Yu (left), vice-general manager of the Bohai Commodity Exchange, jointly inaugurated the Bohai Commodity Exchange (BOCE)-Rubber Valley Natural Exchange in Qingdao, East China's Shandong province, on July 8. [Photo/Xie Chuanjiao]

Li Shiqiang, general manager of Sri Trang Agro-Industry Plc China, said that SNR 20 rubber -- the subject matter of the Natural Rubber Exchange -- is the most common variety of imported natural rubber, accounting for more than 80 percent of total natural rubber imports. The market has long anticipated its trade on the exchange center.

In his speech, Liu Mingjun, vice-mayor of Qingdao, said that Qingdao has played a leading role in the domestic rubber industry. The opening and listing of the Natural Rubber Exchange co-built by the Bohai Commodity Exchange and Rubber Valley is a significant milestone for Qingdao's rubber industry. The exchange will build a new rubber trading platform for rubber producers, traders and manufacturers.

Liu Mingjun (sixth from right), vice-mayor of Qingdao; Xu Wenying (sixth from left), vice-president and secretary-general of the China Rubber Industry Association; and other guests open natural rubber trading in Qingdao, East China's Shandong province, on July 8. [Photo/ Xie Chuanjiao]

Zhang Yan, general manager of Rubber Valley, said that the Natural Rubber Exchange will provide one-stop supply chain solutions by integrating industrial resources, innovating business models and reengineering trading processes.

Rubber Valley makes the best of the imported rubber trade flow, warehousing and logistics service system of Qingdao Free Trade Zone to fulfill seamless cross-border trade, said Zheng Yu, vice-general manager of the Bohai Commodity Exchange.

Xu Wenying, vice-president and secretary-general of the China Rubber Industry Association, said that the irrational fluctuations of natural rubber's prices have hampered the development of the domestic rubber industry. By providing a spot trading platform, the Natural Rubber Exchange will form a multi-level market system featuring interaction among the futures market, the spot market and the physical distribution market. "Faced with the development status in the rubber industry, the upgrading of trading patterns is imminent. The BOCE-Rubber Valley Natural Rubber Exchange is a beneficial attempt to transform and influence the direction of transformation," said Xu.

In recent years, the continuous price fluctuations of natural rubber have resulted in a vicious cycle in rubber trading and producing. Since 2013, the natural rubber industry as a whole has instilled little optimism, which is further exacerbated by the growing pressure within the industry.

Edited by Michael Thai and Chen Jinghong