“We are preparing to launch tin, nickel, alumina and rare earth futures currently. Tin and nickel will be introduced within this year.” said Mr. Yang Maijun, director of Shanghai Futures Exchange at the 10th Shanghai Derivatives Market Forum.
Shanghai Futures Exchange (SHFE) is seeking to become an integrated futures exchange and widen the range of base metal futures traded. The largest volume LME metals – aluminium, copper, zinc and lead – are already traded. Commodity markets are gradually taking off in China. Apart from SHFE there are two other trading platform in China: the Bohai Commodity Exchange and the Wuxi stainless steel electronic trading center. Though the trading volumes are not big, they are increasing slowly.
ITRI China View: Tin futures trading on SHFE will become a valuable tool for domestic enterprises. Owing to the import and export taxes, the China tin price has been partly separated from the global market for years. While it moves roughly in line with the LME there may be significant time lags and big swings in differentials. The announced launch of domestic tin futures trading is being followed closely by tin-related enterprises and traders and investors. An easier way of hedging and investing is welcomed domestically. Flexible capital involvement will help to absorb inventory and regulate the tin market more efficiently.
