The Shanghai Futures Exchange (SHFE) will officially introduce overseas participants to its nickel futures and options markets starting from April 22, 2026 (i.e. from the continuous trading session on the evening of April 21, 2026). These two products will also be open to Qualified Foreign Investors (QFIs).

To ensure the smooth launch and stable operation of these products, SHFE has released relevant circulars and notices regarding the introduction of overseas participants and relevant business rules on March 20, 2026. A relevant executive from SHFE recently addressed market concerns in an interview with the media.

Q1: Why is SHFE internationalizing its nickel futures and options?

The internationalization of nickel futures and options is a key initiative by SHFE to align with global nickel industry trends and serve the development of the real economy. This move is primarily driven by two considerations:

Firstly, nickel has evolved from a traditional industrial raw material into a critical strategic metal for the new energy and high-end manufacturing sectors. The global nickel market is developing rapidly in mining resources, production, and consumption. Asia has emerged as a pivotal hub in the global supply chain. Nickel's application scenario is rapidly expanding beyond the traditional "stainless steel engine" into the high-growth sector of new energy vehicles, with demand also consistently rising in high-end equipment manufacturing sectors such as aerospace, industrial robotics, precision engineering, and marine engineering. As enterprises integrate more deeply into the global market and nickel's application scenarios diversify, the risk management need of relevant nickel enterprises has grown significantly. Consequently, industrial enterprises have a growing demand for SHFE to accelerate the internationalization of its nickel futures and options.

Secondly, the internationalization of nickel futures and options will help to provide risk management tools for the global nickel industry chain and enhance the price influence of key commodities in China. Since its launch in 2015, SHFE nickel futures have maintained a high correlation with domestic spot prices, becoming an essential tool for trade pricing and risk management within China's nickel industry. Internationalizing the nickel futures and options, by introducing overseas investors, will further diversify the market structure. The resulting prices will not only reflect domestic supply and demand but also incorporate the expectations and judgments of global investors. Furthermore, improved market depth and liquidity will foster a healthy interplay between domestic and international prices, providing industrial clients with a more stable trading environment and lower hedging costs. It will also offer price risk management tools for the entire global nickel industry chain, including Chinese nickel enterprises overseas and international trading firms, contributing to the stable and robust operation of the industry.

Q2: What are the key features and highlights of the rules for introducing overseas participants to nickel futures and options?

SHFE actively explores futures business models with Chinese characteristics while  drawing on international practices, and has completed the rule revisions and technical preparations for the internationalization of the SHFE platform, aiming to enhance the product line and promote the long-term development of the market. The key highlights are as follows:

1. Participants: "Overseas Special Participants, Overseas Intermediaries, and overseas clients" are added in the rules to specify that these participants can trade nickel futures and options.

2. Trader eligibility: Mutual recognition of trader eligibility is adopted. For instance, traders who have already opened or hold trading access or trading code of Specified Products on other domestic futures exchanges may be exempted from the knowledge test, fund requirements, and trading experience requirements. Professional investors meeting the criteria of the Measures for the Suitability Management of Securities and Futures Investors may also qualify for these exemptions.

3. Position Exit: Position transfer mechanism has been added for the delivery month contracts of nickel futures. As SHFE nickel futures adopt duty-paid delivery, overseas participants cannot directly participate in physical delivery because they cannot issue or receive VAT special invoices. To address this, SHFE provides an indirect delivery pathway for overseas participants. Specifically, overseas institutional clients or Overseas Special Non-Brokerage Participants (OSNBPs) may apply to transfer their positions to a domestic entity so long as they are linked by a reported actual control relationship. The qualified domestic general institutional client or Non-FF Member may then complete the physical delivery process.

4. Risk Control: Specific provisions for overseas participants regarding position limits, position adjustment to integral multiples of certain number, and forced position reduction have been added.

5. Settlement: SHFE nickel futures are denominated and settled in Renminbi. Overseas traders and overseas brokerage institutions may also use US dollars as margin (in addition to Renminbi). However, US dollar margin must be converted into Renminbi before being used for settlement purposes.

Q3: What measures will SHFE take to prevent risks and ensure the smooth operation of these two products?

In accordance with the principles of preventing risks，strengthening regulation, and promoting high-quality development, SHFE has taken multiple measures covering several aspects including the rules framework, delivery resources, overseas intermediaries, and market activities, to ensure the smooth internationalization of the nickel futures and options.

1. Improving the rules framework. SHFE released the internationalized version of its business rules on July 8, 2025, and the internationalized version of the nickel futures rules and supporting guidelines on March 20, 2026, providing a clear and standardized rules framework for overseas participants.

2. Optimizing contract specifications and ensuring sufficient deliverable resources. SHFE revised the nickel futures contract specifications in 2025 to align with international market standards. Regarding deliverable resources, 14 brands of nickel futures have been registered as of 2025, providing solid support for deliveries.

3. Organizing market activities and preparing for the filing of overseas intermediaries in tandem. With a focus on the “Business Support Initiative” , SHFE will conduct a series of market activies, including online and offline trainings in collaboration with industry associations, and partner with Futures Firm Members and Overseas Intermediaries to hold training sessions in key regions on the internationalization of nickel futures and options. The filing of Overseas Intermediaries with SHFE is currently under way, with several already filed with SHFE.

4. Completing technical preparation and enhancing risk prevention to prepare for the smooth operation of international business. After completing the development of supporting functions of the technical system, SHFE has conducted several rounds of testing and validation, pressed ahead with technical system upgrades and integrated testing, and finalized option contract listing parameters and technical system configurations according to the contract specifications and rules. A whole market rehearsal will be organized prior to the official launch to ensure smooth market operation.

Moving forward, in line with the principles of preventing risks, strengthening regulation, and promoting high-quality development, SHFE will actively and prudently carry out the work surrounding the internationalization of the nickel futures and options. This includes strengthening market monitoring and analysis to ensure the stable operation of the market, and collaborating with various stakeholders to enhance the functionality of these futures and options. Meanwhile, SHFE will work with its members to conduct market activities, seminars, trainings, and investor education activities to attract diverse domestic and international participants, with the aim to further promote the opening of China’s futures market and steadily moving towards its goal of becoming a world-class exchange.