Summary of February 2011 Activities at TOCOM
Average Daily Volume for February 2011 Is Down 2.1% From Previous Month
Tokyo Commodity Exchange announced March 4 that February, 2011 trading volume averaged 118,023 contracts per day, down 2.1% from January, 2011.
The decrease was led by the gold contract, which is TOCOM’s most traded commodity. Volume was down 14.2% from the previous month to 45,694 contracts per day. The gold mini contract decreased 28.2% to 8,453 contracts per day. Trade in the Oil market was active, particularly toward the end of the month, due to the increased volatility of crude oil prices. The average trading volume of gasoline was up by 46.4%. Trading volume for rubber averaged over 24,000 contracts per day, up 26.5% from the previous month, and has doubled on a year-over-year basis due to significant price volatility.
At the end of February, open interest in all listed commodities totaled 370,075 contracts, a slight decrease of 8,083 contracts from the end of January, 2011.
Price Volatility of Crude Oil, Gold and Rubber Heightens According to Unrest in Middle East and Growing Demand in Emerging Markets
The price of TOCOM’s Middle East crude oil has risen significantly due to the surge of pro-democracy movements in North Africa and Middle East. Particularly in late February, prices rose as the uprisings in Libya drew increased media attention. The active contract month (July 2011) reached 56,700 yen per kiloliter on February 25, a price last seen in October 2008.
Dollar-denominated crude oil went even higher, reaching 110 US dollars per barrel on March 2.
TOCOM gold recovered to 3,776 yen per gram on March 2, having dropped to 3,500 yen per gram in January (settlement price of the active contract month). NY gold recorded its highest price since listing at 1,434.4 US dollars on March 1. The market is responding to the growing demand for gold as “safe haven” that is not managed by any national government.
Rubber prices have risen sharply due to booming demand from automobile tire production in emerging markets, bad weather conditions in production regions and seasonal curtailment of rubber sap collection in the past month. The active contract month exceeded 500 yen on February 4 for the first time and reached as high as 535.7 yen on February 18. After that, however, the price fell sharply to 455 yen on February 28 with increased volatility. As supply remains tight, the price of the nearest contract month continues to rise faster than the backdated contract months.
The spread between the June, 2011 contract and July, 2011 contract is particularly steep.
Foreign Customer Trades Increased in January 2011
In January, 2011, the volume of foreign customer trades increased by 16.5% to 941,330 contracts, which accounts for 20.5% of the month’s total volume of Exchange trades. This ratio is the second highest after the 941,491 contracts traded in November, 2007.
This increase can be seen as the result gradual revisions to the Exchange’s market design. This includes the introduction of a new trading system with the world’s highest level of performance and trading functionality, revised trading rules and the introduction of SPAN margining.