Dalian Commodity Exchange

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Dalian Commodity Exchange
Dalian logo.jpg
Founded 1993
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
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 as the world's 12th largest derivatives exchange in 2018, with 981 million contracts traded, down 10.8 percent from the previous year.[1]

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.

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.

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.[3]

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.[4]

On February 26, 2014, DCE and The Dubai Gold and Commodities Exchange announced the simultaneous launch of polypropylene futures contracts at the Middle East Plastics Seminar in Dubai.[5]

Contract Volume

Year Total Annual Volume* Percent Change
2018 981,927,369 (-)10.8%
2017 1,101,280,152 (-)28.4%
2016 1,537,479,768 37.7%
2015 1,116,323,375 45.0%
2014 769,637,041 9.9%
2013 700,500,777 10.7%
2012 633,042,976 119%
2011 289,047,000 (-) 28.3%
2010 403,167,751 (-) 3.3%
2009 416,782261 --

Contracts Listed

References

  1. 2018 Annual Volume Survey. Futures Industry.org.
  2. History. DCE.
  3. The Fall and Rise of Chinese Futures. FIA.
  4. The DCE Announced PVC Futures Contract. DCE.
  5. DGCX and China's Dalian Commodity Exchange Launch Plastics Futures Simultaneously. Zawya (press release).