Dalian Commodity Exchange
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| Dalian Commodity Exchange | |
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| Founded | 1993 |
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| Headquarters | Dalian, People's Republic of China |
| Key People | Liu Xingqiang, director general; Guo Xiaoli, vice-president |
| Products | Futures in corn, soybeans, barley, palm oil and plastic |
| Corporate Website | www.dce.com.cn |
The Dalian Commodity Exchange (DCE) is the smallest of China’s three futures exchanges in terms of the amount of futures and options cleared by the exchange as of 2010, according to the FIA's 2011 annual volume survey. It offers an agricultural complex including soybean and related products, corn and palm oil futures.
The Dalian Commodity Exchange ranked the world's 13th largest derivatives exchange, falling two places from 2009, and losing ground to its competitor, the Zhengzhou Commodity Exchange, according to the Futures Industry Association's volume rankings for 2010.[1]
The FIA report, published in March of 2011, notes that the number of contracts traded on the DCE fell by 3.3% compared to the previous year, with a total volume of 403.2 million.
History
The DCE was established on Feb. 28, 1993, in Dalian, a major port city at the southern tip of Liaoning province in north-east China, adjacent to the country’s main soybean-production region.[2]
The exchange emerged from the restructuring of China’s futures industry, which was revived in 1990 after a 60-year hiatus, but saw the government close many of the 40-plus exchanges which emerged because of widespread price manipulation.
In 1995 the 15 remaining exchanges were reduced to three, with the DCE trading agricultural products alongside the Zhengzhou Commodity Exchange and the Shanghai Futures Exchange, which listed metals and rubber. Financial futures were banned in 1996, but the government since has announced plans to list stock index products on a new exchange.
The three exchanges were linked with a single electronic network in 2001, and rapid growth in the core soybean contract at the DCX saw it rank second to the New York Mercantile Exchange among global commodity platforms that year.
Liu Xingqiang was appointed to head the DCX in 2006, replacing Zhu Yuchen, who was appointed general manager of the new Shanghai Financial Derivatives Exchange.
Structure and Regulation
The DCE is a self-regulated, non-profit organization, overseen by the China Securities Regulatory Commission. Most trading is conducted electronically, with a small element of open outcry.
As of November 2007, the exchange had 194 members – including 180 brokers, and 163,837 clients. Louis Dreyfus became the first foreign member in June 2006.
Recent performance
The non-profit DCE combines electronic trading and open outcry, with rising demand for its soybean contracts – ranked number one globally – lifting overall volumes by 18.7 percent to 117.7 million in 2006.[3]
In 2007, the exchange listed its first non-agricultural product - LLDPE - and also added refined palm oil. It has also announced plans to list futures in rape seed, live hogs and weather-related products[4].
The exchange signed a memorandum of understanding with U.S.-based NYSE Euronext in November of 2008 to develop futures and options markets in the two countries and internationally.[5]
Following the successful launch of polyvinyl chloride (PVC) futures on May 25, 2009, the DCE is currently preparing for an introduction of coke futures in the second half of the year[6].
Product Development
A near-tripling in volumes of its benchmark corn future in 2006 saw the contract leapfrog the DCX soy complex to become the single-largest product, with the 65 million traded, trailing only NYMEX WTI Crude in the global commodity rankings.[7]
The launch of a soymeal contract in July 2000 saw the DCX become China’s largest commodity exchange that year.
The soy complex was split in 2002 with the launch of a benchmark non-genetically modified soybean contract – known as No.1 soybeans – with a GMO contract – known as No.2 soybeans – following the next year. Volumes in the No.2 contract collapsed in the first half of 2007 because of import restrictions, and the exchange is considering combining the two contracts.
Soybean oil was added on Jan. 9, 2006, with linear low-density polyethylene launched on July 31, 2007, competing with the plastic contract listed by the London Metal Exchange A refined palm oil futures contract was started on Oct. 29, 2007, and exchange officials have announced plans for further contracts spanning ethanol, rape seed, live hogs, paddy rice and weather products.
On May 19th 2009, Dalian Commodity Exchange (DCE) announced that polyvinyl chloride (PVC) futures trading would start on May 25, and that it was revising detailed rules to carry out the launch. On May 18, the China Securities Regulatory Commission announced it had approved DCE to launch PVC futures.[8]
Volumes
2009
The Dalian Commodity Exchange ranked the world's 11th-largest derivatives exchange, one notch below its larger rival in China, the Shanghai Futures Exchange, in the Futures Industry Association's volume rankings for 2009.[9] The FIA report, published in early April 2010, notes that the number of futures and options traded on the DCE rose more than 30% pver 2008 to reach a total volume of 416.78 million.
Contracts Listed
- DCE Corn futures
- DCE No.1 Soybeans futures
- DCE No.2 Soybeans futures
- DCE Soy Meal futures
- DCE Crude Soybean Oil futures
- DCE Linear Low Density Polyethylene futures
- DCE RBD Palm Olein futures
- DCE PVC futures
References
- ↑ 2010 Annual Volume Survey. Futures Industry.com.
- ↑ History. DCE.
- ↑ Volume Growth Accelerates. FIA.
- ↑ Press Release. DCE.
- ↑ Chinese, U. S. exchanges to jointly develop futures, options markets. Xinhua.
- ↑ [hhttp://english.cctv.com/20090706/109647.shtml Chinese coke futures to begin at Dalian exchange]. China Central Television.
- ↑ The Fall and Rise of Chinese Futures. FIA.
- ↑ The DCE Announced PVC Futures Contract. DCE.
- ↑ 2009 Annual Volume Survey. FIA magazine.
