eeo.com.cn: Industrial Metal Commodity Index Provides New Tools for Industrial Chain Risk Management

Updated on: July 7, 2015

Reported by Han Songhui, Journalist from eeo.com.cn

On July 3, 2015, Galaxy Futures Non-Ferrous Metals Futures Seminar was held in Jinan, the seminar experts expressed, with continuous development and improvement of metals index, SHFE Industrial Metal Commodity Index (IMCI) will have a broad application space in non-ferrous metals industry chain service. Compared with the traditional single metal futures contract, metal index has unique advantages in hedging with its compiling method and characteristics. To be specific, firstly, several varieties synchronous trade, which is beneficial to reduce the price risk of individual variety. Secondly, the transaction is convenient; enterprises can better achieve the purpose of hedging by buying or selling index futures. Third, making hedging strategy by using index and the individual variety; the enterprise can choose the more favorable hedging scheme according to the price difference. In terms of commodity ETF that investment institutions attach great importance, experts from SHFE said, commodity ETF grow rapidly at abroad, being relatively mature in recent years. Developing ETF products by using the existing commodity futures in China market has a positive significance: one is the introduction of institutional investors to participate in commodity futures market, and is conducive to improve the structure of the investors. Two, the large number of investors by professional management of funds can participate in commodity investment, expand the development space of the fund industry and promote the construction of multi-level capital market system. Third, meet investors' diversified asset allocation demand, effectively spread investment risk. The preparation for the listing of non-ferrous metal index futures should be speeded up, and the promotion of commodity futures ETF should be accelerated to make domestic commodity futures varieties an integral part of the asset allocation of domestic and foreign institutions. The seminar attracted representatives from more than 80 non-ferrous metal related enterprises, professional investment institutions and individual investors.