The Shanghai Futures Exchange (“SHFE”) and China Non-ferrous Metals Industry Association (CNIA) signed a strategic cooperation agreement in Shanghai on April 29. Yang Maijun, Chairman of the Board of Directors and Secretary of the Party Committee of SHFE, Chen Quanxun, Chairman and Secretary of the Party Committee of CNIA, Ye Chunhe, Vice-president of SHFE and Shang Fushan, Vice-chairman of CNIA attended the signing ceremony.

At the signing ceremony, Chen Quanxun spoke highly of the significance of serving the physical industrial development through non-ferrous metals futures market, and the fruitful cooperation between the two parties over the past years. He says the non-ferrous metals industry is a highly marketized and internationalized industry in China featuring an earlier initiation of futures trading and mature market operation. The trading of non-ferrous metals futures run by SHFE is the most influential metal futures trading platform in China with non-ferrous metal enterprises as major participants. With the constant development of the non-ferrous metals industry, the non-ferrous metals futures market enjoyed rapid growth as well, as is reflected by the continually expanding market size, enhanced capability of serving real industry and improved influence and status in the world. Therefore, a win-win of futures and spot markets that contributes to industrial development has been achieved. CNIA and SHFE has been working together for years, delivering remarkable results in the industrial research on copper, aluminium, lead, zinc, gold and silver, the recommendation of products for listing and registered brands for delivery, investor education and new non-ferrous metal futures products research and development.

Chen Quanxun says the signing of the strategic cooperation agreement will lead to deepened cooperation between the two parties in different forms, especially in the investor education in the non-ferrous metals industry. The purpose of the said efforts is to substantially improve the ability of enterprises to use futures tools so that the futures market can better serve real industry. CNIA will spare no efforts to support SHFE in research on futures products and in the timely launch of new products such as futures and options on tin, nickel and non-ferrous metal index to enrich the series of non-ferrous metals futures and contribute more to the goal of becoming a non-ferrous metals industry power.

Yang Maijun made an introduction to the steady development and operation of the Exchange’s non-ferrous metals futures and gave recognition to the coordinated development of the non-ferrous metal futures industry and physical industry based on mutual promotion. He adds, over the past 20-plus years following the establishment of China’s non-ferrous metal futures market, China’s non-ferrous metals futures industry and physical industry have achieved win-win development based on mutual promotion thanks to the great-leap-forward development of the non-ferrous metals industry. On one hand, thanks to its steady development and smooth operation, China’s non-ferrous metal futures market has become an important market only second to LME in terms of its international influence. On the other hand, the continuous functioning of futures market to serve real economy in turn has propelled the sustainable industrial development. First, futures market added impetus to the shaping of the market-oriented pricing mechanism across the non-ferrous metal industry. Second, market-oriented resource allocation pattern has been shaped via futures market to facilitate the extension of both upperstream and downstream industrial chains and protect the overall production and operating benefits of the industry. Finally, a shift in enterprises’ production and operation management model has been achieved by the use of futures vehicles to establish a risk management platform with hedging as the core. The futures market is indispensable to the survival and growth of the non-ferrous metals enterprises of China.

Yang Maijun says the Exchange has been working closely with CNIA in the fields of new futures product development, market training, industrial service and collaborative research for a long time. To further facilitate the comprehensive and deep-level cooperation, both parties decided to sign the strategic cooperation agreement on the basis of full consultation, which was another important move to intensify the initiatives to serve the real economy via futures market that was raised by CSRC at the securities and futures regulation meeting. With the signing of the strategic cooperation agreement and the deepening cooperation between the two parties, the role of further of market to serve the non-ferrous metals industry will be more noticeable both intensively and extensively. In other words, futures market will play a more vigorous role in driving the sustained rapid development of China’s non-ferrous metal industry and building Shanghai into an international financial center.

According to this Agreement, both parties will work together in market survey, co-organization of conference, market training and industrial service, product innovation and project research. They will join hands to: organize market training and investor education in the fields of new product marketing for listing, business innovation, system innovation, etc.; organize market training and investor education for key areas and industrial clients and institutional investors to improve industrial service; organize related market survey and write valuable market survey reports to promote the benign interactive development of the non-ferrous metals industry and the futures market as well as the effective market functioning. Additionally, each year the top management of both parties will visit each other from time to time to strengthen their friendship and bilateral cooperation.