“The reason you don’t see much outflow from Fanya’s warehouses is that the producers have quite high expectations of the prices they can achieve [on the exchange] from investors, so they prefer to collateralise [metal] rather than sell it straight to the market,” said Zhang, formerly of Blackrock, CITIC and Thomson Reuters.
“The introduction of the offshore exchange and exposure to real-world prices should significantly reduce the discrepancy between Fanya and the real spot market,” he added.
Dennis Zhang, Fanya's new gm of global markets
The Fanya Metal Exchange has been watched closely since its launch in China in 2011, as this report from Metal Bulletin back then shows
, with market participants variously concerned about stock levels, prices and the constituency of the exchange's users.
The new platform is termed the offshore board, because, although it is located in Xiamen in China, the exchange plans...