CNS: SHFE Launches Non-ferrous Metals Index Futures to Cut Hedging Costs for Enterprises

Updated on Jun 01,2015

By Yu Jun

According to Financial and Economic News of China News Service (CNS), Shanghai, June 1, at the “Ruida Futures 2015 Kunming Promotion of Investment in Bulk Commodities” held recently in Kunming, the experts present at the meeting believed that the non-ferrous metals index futures to be introduced by the Shanghai Futures Exchange (SHFE) will help the enterprises reduce the costs of hedging.

According to the experts, compared with commodity futures, the non-ferrous metals index futures, which are to be launched soon, are more attractive to institutional investors because of the cash delivery, the avoidance of gradient margin system, the participation directly or indirectly through index ETF and other features. In addition, the steady and long-term funds from institutional investors will help improve the market liquidity and reduce the hedging costs of entity enterprises.

An expert of the SHFE briefed the representatives of the entity enterprises on implementing a basket of metals hedging strategies and combined copper prices hedging strategy. The expert also said that the SHFE will further facilitate the participation of the institutions in the commodity futures market and improve the structures of the investors in the commodity futures market, so as to support the real economy.

Attending the meeting were more than 100 representatives of entity enterprises of non-ferrous metals and professional investment institutions and individual investors.