Total trading value of China's three commodities exchanges in Shanghai, Dalian and Zhengzhou surged to 4.3 trillion yuan (US$518.07 billion) during January to June, enjoying a year-on-year 186.72 percent increase.

Trading in natural rubber, which is traded only in Shanghai, surged 193 times year-on-year to 1.5 trillion yuan during the first half, accounting for 34 percent of total transactions in the three exchanges.

Natural rubber prices climbed 16.8 percent to 15,505 yuan per metric ton during January to March.

The wild fluctuation in natural rubber prices has attracted speculative players to seek profits in the market, making the contract the most active product among six commodities traded in the exchanges.

But prices of natural rubber plummeted 34.6 percent in April to 10,135 yuan, according to Wu Qizhi, analyst with China Aviation Futures Co Ltd.

October rubber was 10,290 yuan a ton yesterday.

Natural rubber may dip further to a "reasonable" range of between 9,300 yuan and 10,000 yuan, according to Wu.

But another analyst believed there is still some room for natural rubber prices to rebound due to reduction in production costs with development of new technology.

Increasing rubber production would also benefit rubber prices, stemming demand from carmakers as the world's automotive industries shift production to China, said Shi Hai, analyst with Shanghai Waigaoqiao Futures.

But some analysts pointed out that no fresh capital is likely to enter the natural rubber market in the near future, which may subdue the market liquidity in the second half.

Analysts are also pinning hope on a surge in copper and aluminum trading.

(Shanghai Daily July 9, 2003)