By Wang Yun
Nickel and tin futures will be listed on March 27 in the Shanghai Futures Exchange (SHFE), which will further the clustering effect of nonferrous metal futures products in serving the real economy and widen and deepen the services of the futures market for the real economy. China’s nonferrous metal futures market is of high degrees of marketization and internationalization, as well as ideal exertion of market functions, so that market participants highly recognize nonferrous metal futures products listed on the SHFE, and more and more nonferrous metal enterprises admit that their survival and development are strongly reliant on the futures market.
Chairman Yang Zhiqiang of Jinchuan Group Co., Ltd. said that in the face of fierce fluctuations of nickel price worldwide, China being the world’s largest producer and consumer of nickel, must have a futures market with independent pricing power for development of our nickel industry. Jinchuan, the world’s third largest and China’s largest nickel smelting business, has globalized its projects, raw materials and product markets of nickel resource and expects domestic listing of nickel futures products. The listing of nickel futures on the SHFE will help establish the market-based pricing mechanism on China’s nickel industry chain, provide practical risk management tools for upstream and downstream enterprises on the chain, ensure reasonable allocation of market resources, and guarantee sustainable development of China’s nickel industry chain.
Chairman Gao Wenxiang of Yunnan Tin Company Limited claimed that the absence of tin futures in China has caused the absence of effective hedging tools for domestic enterprises of tin production, circulation and consumption to cope with substantial fluctuations of raw material prices. The promotion of tin futures product on the SHFE can optimize the pricing mechanism of tin, win China higher discourse power in the global tin market, enhance the capacity of upstream and downstream enterprises in controlling the risk of price fluctuations, and grant diversified trading means and price references for producers and traders, all in a bid to promote reasonable allocation of tin resource and the balance of supply and demand. “We’re the world’s largest tin producer, willing to cooperate with our fellow traders to boost sound operation of tin futures market and sustainable development of tin industry.”
General Manager Lu Peng of Tin and Nickel Department in China Minmetals Non-ferrous Metals Co., Ltd. commented that the listing of tin futures on the SHFE will set up a legitimate, open, fair and just futures trading platform for home producers, traders and consumers of tin, generate a standardized price discovery mechanism of tin commodity, and endow trade participants with a new way of trading and of hedging. Tin consumption has been growing fast these years, but the price of China’s spot market of tin has been very different than that of its global counterpart. The listing of tin futures will boost the interplay between domestic and global tin prices, facilitate import and export trade flows, and accelerate the globalization of China’s tin market, thereby giving China a market influence that matches its status as world’s largest tin producer and consumer.
Relevant insiders believe that listing of nickel and tin futures products will be of great significance for sustainable development of nickel and tin industries in China and the function of nonferrous metal futures market in serving the real economy. Firstly, by exerting price discovery of futures market and the hedging function, a market-based pricing mechanism of nickel and tin industries may be established; secondly, it can provide workable risk management tools for upstream and downstream enterprises on nickel and tin industry chains; thirdly, it can strengthen the international pricing power of China’s nickel and tin industries, upgrade industry structure and ensure sustainable development of the two industries; fourthly, copper, aluminum, lead, zinc, nickel and tin are the 6 base metals most commonly used industrially, so that listing of nickel and tin futures products will facilitate the completion of China’s nonferrous metal futures sequence and generate products’ clustering effect; fifthly, the listing will also aid in perfecting the Industrial Metal Commodity Index and seeking and developing institutional investors.
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