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Hexun: The SHFE Organizes Training in Non-ferrous Metals Index Futures for Entity Enterprises


By Qiao Jing

Recently, the Shanghai Futures Exchange (SHFE) has organized activities for the entity enterprises in Shanghai, Anhui and other regions in a bid to provide training in the non-ferrous metals index futures on the SHFE and promote the commodity futures ETF. In order to meet the requirements of the “New State Nine Opinions” for “developing commodity options, commodity indexes, rights of carbon emission and other instruments of exchange, giving full play to the roles of the futures market in price discovery and risk management, and strengthening the capacity of the futures market for serving the real economy,” the SHFE has designed the non-ferrous metals index futures with the aim of serving the real economy and introducing institutional investors. After rounds of discussion and optimization, the technical system and other preparatory work have been completed on the whole.    
At the “2015 Minmetals & Jingyi Meeting on Promotion of Tin and Nickel Futures” held in Shanghai on May 22, the experts from the office of promoting innovation in derivatives of the SHFE detailed the unique advantages of the non-ferrous metals index futures that the entity enterprises can take in hedging. First, the synchronous trading on several products helps reduce the price risks for a single product; second, as the trading is conducted in some secret, the enterprises can achieve the objective of hedging by buying in or selling out the index futures, and the difficulty for the counterparties in finding the changes of the positions is conducive to concealing important trade information. In addition, an expert of the SHFE said that the SHFE will include the newly listed nickel, tin and other non-ferrous metal products in the non-ferrous metals index and the index futures at proper time, so as to better meet the demand of the entity enterprises for hedging.
At the “Forum on Situation and Countermeasures of the Wire and Cable Industry in Anhui Province” held in Anhui on May 23, the experts of the SHFE briefed the representatives of the entity enterprises in the wire and cable industry on how to combine the non-ferrous metals index futures and a single product in the hedging strategies, providing new options for the entity enterprises to avoid the risks of price fluctuation. An expert also pointed out that the non-ferrous metals index futures and the related commodity futures ETF will attract institutional investors to participate in investment, and help improve the structure of the investors in the commodity futures market. The institutional investors will not only bring additional funds to the market and improve the market liquidity, but also make the market more balanced and stable.

Attending the activities were more than 400 representatives of over 200 medium-sized and large industrial companies, distribution firms and professional investment institutions.