Shanghai Futures Exchange
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| Shanghai Futures Exchange | |
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| Founded | 1998 |
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| Headquarters | Shanghai, PRC |
| Key People | Yang Maijun, President & CEO; Wang Lihua, chairman |
| Products | Futures in copper, aluminum, natural rubber, fuel oil, crude, zinc and gold |
| Corporate Website | http://www.shfe.com.cn/Ehome/index.html |
The Shanghai Futures Exchange (SHFE) is one of the largest commodities markets in China. The exchange lists contracts in steel, copper, aluminum, natural rubber, fuel oil, zinc and gold.[1]
The exchange was ranked 14th among world derivatives exchange by the Futures Industry Association in 2011, with total volume of 308.2 million contracts, down 50.4 percent from a year earlier, when the exchange posted 621.8 million contracts. The exchange's volume ranking slipped from 11th to 14th in 2011, according the annual volume survey from FIA.[2]
SHFE is set to make history in China's derivative markets, as the first Chinese exchange to open futures trading to non-Chinese participants. In October 2012, Chinese regulators announced that qualified overseas investors would be allowed to trade the SHFE's crude oil futures contract.[3]
History
The SHFE was formed in 1998 as part of 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.
The Shanghai Futures Exchange was formed from the merger of the Shanghai Metal Exchange, Shanghai Cereals and Oil Exchange and Shanghai Commodity Exchange. It is one of three surviving entities alongside the the Zhengzhou Commodity Exchange and the Dalian Commodity Exchange, though a Shanghai-based financial derivatives exchange is being developed.
The Shanghai Futures Exchange was ranked the world's 14th largest derivative exchange by volume in 2011, down from 11th in 2010 and 10th in 2009. In 2011, it was second to the Zhengzhou Commodity Exchange, which ranked 11th globally, according to the annual Futures Industry Association's survey of the world's leading derivatives exchanges. [4]
Product Development
Trading started in May 1999, with futures in copper, aluminum, and rubber, and the SHFE is now the premier metals exchange in Asia, competing with the London Metal Exchange, and offering benchmarks including aluminum and copper. However, its natural rubber contract has been the most heavily-traded in China in notional value terms since 2006, followed by its copper futures, whose volume tripled from 2006 to 2007.
A fuel oil future was added on Aug. 24, 2004, and the SHFE has been one of the most active campaigners for regulators to approve new commodity and financial products. While it has long sought to launch steel futures – despite industry resistance – it launched a zinc future on March 22, 2007, and received approval to start a SHFE gold futures contract - launched on Jan. 9, 2008,[5] with silver futures expected to follow. Nickel, lead, crude oil, liquefied natural gas and coal have also been identified by exchange officials as areas of potential expansion.[6]
SHFE moved up from third in 2008, accounting for 36 percent of the total volume of all futures contracts traded in China, up from 21 percent in 2008, while in terms of notional value, its market share remained the largest, with 55 percent of the total turnover, up from 40 percent in 2008.
The rubber contract accounted for 44 percent of total exchange turnover in 2006, 38 percent in 2007, and 32 percent in 2008, but the electronic exchange unveiled a new product innovation strategy focused on expansion in metals, energy and chemicals and received approval in 2007 to launch futures in gold, rapeseed oil and low-density polyethylene.
The SHFE also launched a steel wire rod futures contracts in March 2009[7][8].
Following the official launch on March 27, 2009 one of the two two types, SHFE steel rebar futures and steel wire rod futures, quickly developed into actively traded steel contracts. In 2009, SHFE reported that 32,314,9042 rebar futures contracts and 2,184,032 wire rod futures were traded on the exchange in the first nine months.</ref>[9]
Structure and Regulation
All contracts are settled by physical delivery. Trading hours are from 9 a.m. 11:30 a.m. and 1:30 p.m. to 3 p.m. The SHFE is a self-regulated, non-profit organization, overseen by the China Securities Regulatory Commission, with 219 members, including 183 brokerage firms. It also hosts more than 250 distant terminals.
Contracts Listed
- SHFE Copper Cathode futures
- SHFE Aluminum futures
- SHFE Natural Rubber futures
- SHFE Fuel Oil futures
- SHFE Zinc futures
- SHFE Gold futures
- SHFE Steel Wire Rod futures
- SHFE Steel Rebar futures
Volumes
2011
The exchange was ranked 14th among world derivatives exchange by the Futures Industry Association in 2011, with total volume of 308.2 million contracts, down 50.4 percent from a year earlier, when the exchange posted 621.8 million contracts. The exchange's volume ranking slipped from 11th to 14th in 2011, according the annual volume survey from FIA.[10]
2010
In 2010, SHFE ranked as the 11th largest derivatives exchange in 2010 by volume, according to the Futures Industry Association's 2010 annual volume survey, published in March of 2011.[11] The exchange's total annual volume for 2010 increased by 43 percent from the previous year, trading 621.8 million contracts.
2009
The SHFE experienced rapid growth in 2009, and its annual volume for the year rose 210 percent over 2008's figure, according to the Futures Industry Association, helped by its signature Fuel Oil Futures contract.
References
- ↑ China ranked No.1 in world commodity exchanges. The Australian.
- ↑ 2010 Annual Volume Survey. Futures Industry.com.
- ↑ China Advances Launch of Crude-Oil Futures. Wall Street Journal.
- ↑ 2009 Annual Volume Survey. FIA magazine.
- ↑ Press Release. SHFE.
- ↑ Shanghai exchange plans silver futures. Thomson Financial.
- ↑ Shanghai to launch steel futures on Mar. 9 -brokers. Reuters.
- ↑ Shanghai exchange says to launch steel futures Friday. Thomson Reuters.
- ↑ Monthly Report. SHFE.
- ↑ 2010 Annual Volume Survey. Futures Industry.com.
- ↑ 2010 Annual Volume Survey. Futures Industry.com.
