Skip to main content

INE:First Standard Warrants for Bonded Copper Created

 On January 20, 2021, the standard warrants for 100.446 metric tons of SPCC-ILO Grade A copper produced by Southern Copper Corporation were officially created by Shanghai Yangshan Free Trade Port C. Steinweg Logistics Co., Ltd. This marks the first registration of standard warrants for bonded copper futures since the contract was listed for trading on the Shanghai International Energy Exchange (INE).

This shipment of copper cathodes was purchased by Rich Fortune International Industrial Limited (“Rich Fortune International”) through an overseas copper trading house, arriving at the Yangshan Special Comprehensive Bonded Zone in early January 2021. It then underwent the inspection of Yangshan Customs, the load-in inspection by the designated delivery warehouse, verification by INE, and quality checks by the Shanghai Customs Industrial Products and Raw Material Testing Technology Center before registration. The head of Rich Fortune International noted that the creation of these warrants lays a solid foundation for the company’s engagement in the physical delivery of bonded copper futures. Rich Fortune International is reported to plan to take part in the very first delivery of bonded copper futures, which will take place in March 2021.

Market observers believe that INE’s bonded copper futures has made a strong showing within merely two months of listing. The creation of the first standard warrants by Rich Fortune International, a Hong Kong-based company, indicates that industrial enterprises—and overseas participants in particular—are recognizing and tapping into the functions of the product. It also means that the various designs and processes for bonded copper futures are now being tested in practice.

According to Rich Fortune International, bonded copper futures caters to the tax-exclusive markets outside Chinese customs—including on-shore bonded areas and the markets of countries and regions in the Asia-Pacific time zones—and reflects international supply and demand. As a new, efficient, and transparent market, it provides investors with an added choice: businesses may compare the prices of the SHFE copper futures, INE bonded copper futures, and LME copper futures, and engage in spot trading at the most favorable price. In addition, bonded copper futures’ RMB denomination makes for an efficient trading, clearing, and delivery process, removing the uncertainties businesses may have in foreign exchange conversion, thereby helping them avoid foreign exchange losses and fluctuations.

Since its listing on November 19, 2020, the market for INE’s bonded copper futures has been generally stable, with a steadily expanding participant base and active involvement of overseas institutional clients. INE’s bonded copper futures price is closely related with the international spot price, and the price correlation is as high as 99%, attracting greater market interest in this product. Once the trading rules and processes for this product are better understood by market participants, the trading volume, open interest, and the number of outstanding warrants will further increase and this product will be more effectively utilized. As of January 20, 2021, the single-counted trading volume, turnover, and highest daily open interest in bonded copper futures have reached 780,700 lots, RMB 201.545 billion, and 23,400 lots, respectively.

An INE official in charge of delivery activities said that physical delivery has been a longstanding priority for INE and is under continuous improvements. INE has held a series of training sessions to offer market participants a comprehensive introduction to the bonded copper futures. Special attention is given to explaining how to perform the various tasks relating to deliverables under a particular customs status, and what to watch out for in terms of regulatory compliance. Moving forward, INE will closely monitor investor needs to streamline the delivery process and optimize the location of delivery warehouses.

For China derivatives market access and more market information please contact sherry_ustc@163.com


Labels:

Comments

Post a Comment

Popular posts from this blog

ZCE: Circular on Expanding the Investment Scope of Qualified Foreign Investors in Commodity Futures and Options

  With the approval of the China Securities Regulatory Commission (CSRC), starting from   March 4 , 202 5  (i.e. from the continuous trading session on  March   3 , 202 5 ),  Zhengzhou Commodity  Exchange  ( ZCE ) will expand the investment scope of Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors (hereinafter collectively referred to as Qualified Foreign Investors, QFI s ) to include the following commodity futures and options: 1.P araxylene , b ottle-grade PET resin , m anganese silicon , r apeseed meal , peanut kernel f utures contracts; 2. P araxylene , b ottle-grade PET resin , m anganese silicon , r apeseed meal , peanut kernel, polyester stable fiber  options contracts . For China derivatives market access and more market information please contact  sherry_ustc@163.com
Post a Comment
Read more

INE: Circular on Adding the Deliverable Crude Oil for Crude Oil Futures

  In accordance with the Contract of Crude Oil Futures of Shanghai International Energy Exchange(hereinafter referred to as INE) and the Delivery Rules of Shanghai International Energy Exchange, INE hereby decides to add Murban crude oil as deliverable crude. The loading port is set to be either Fujairah Terminal or Jebel Dhanna Terminal. The grade and price differential of the newly-added deliverable crude oil are stipulated as follows:   Grade and Price Differential of the Newly-added Deliverable. Crude Oil for INE Crude Oil Futures: Country Deliverable Crude API Gravity Sulful (%) Premium or Discount (Yuan/Barrel) United Arab Emirates Murban ≥35 ≤1.5 5 Notes: 1. API gravity = (141.5 / S.G.60/ 60 °F) – 131.5; S.G.: as per ASTM D1298. 　　　 2. Sulfur content: as per ASTM D4294.   From June 1st, 2021, the Murban crude oil will be allowed to be loaded-in and be used for standard warrant issuance and futures delivery. INE will closely track and review market development in ea...
Post a Comment
Read more

INE Apporved TSR 20 Brand Registration of Sri Trang, Hevea and KIRANA

Announcement on the Approval of Sri Trang Agro-Industry Public Co. Ltd. to Add TSR 20 Deliverable Commodity 　　 The Shanghai International Energy Exchange (INE) has recently received the application materials from Sri Trang Agro-Industry Public Co. Ltd. Accordingly, INE issues the following decisions: 　　 1. INE approves the registration of TSR 20 produced by BD10 factory of Sri Trang Agro-Industry Public Co. Ltd. as deliverable commodity of INE, and this brand will be subject to standard delivery prices; 　　 2. TSR 20 produced by BD10 factory of Sri Trang Agro-Industry Public Co. Ltd. from the date of this Announcement can be loaded in and standard warrants can be issued.  BD10 factory product information: 　　 Registrant: Sri Trang Agro-Industry Public Co. Ltd. 　　 Country: Thailand 　　 Brand: Sri Trang 　　 Factory code: BD10 　　 Delivery product: STR 20 　　 Executive Standard: in accordance with contract specifications 　　 Labeling: (as shown below) Announcement on the Ap...
Post a Comment
Read more