China seeking to export Shanghai copper benchmark and yuan via new contract

More of the world's copper looks likely to be priced in China from next year, with the Shanghai International Energy Exchange (INE) set to launch a new contract tradable by international market participants.

The decision to launch, pending regulatory approval, would enable market participants based outside China to trade copper based on a Chinese price, sources told Fastmarkets
China, which is the world's leading consumer of copper and many other commodities, has moved to internationalize the trading of its commodity futures in part to promote the use of the Renminbi beyond its borders. 
But an internationally traded Chinese copper contract could also have profound impact on the global copper market by expanding the current Shanghai Futures Exchange price into a regional benchmark and encouraging greater arbitrage with more global contracts, market experts said.

“It's about developing a service so that the producers and consumers in the Asia region can participate in the regional benchmark, which is the Shanghai price,”John Browning, managing director of China-focused brokerage BANDS Financial told Fastmarkets. “It's providing a hedging mechanism through which these guys...


Archie Hunter

December 05, 2019

11:08 GMT