Chapter 2    PROCEDURES OF DELIVERY

     Article 8  After the physical delivery process has concluded, if the buyer disputes the quality or quantity of the deliverable commodity (any disputed natural rubber, silver, or bleached softwood kraft pulp  shall remain in the designated delivery storage facility), it shall submit a written request to the Exchange for a resolution on or up to the fifteenth (15^th) business day of the month following the spot month (if that date is a public holiday, the deadline shall be postponed to the next business day), and provide a quality assay report issued by a certified assayer( see Appendix 1 hereto for the list of certified assayers; a list of certified assayers for lead, nickel, tin, and silver, and bleached softwood kraft pulp futures will be separately announced by the Exchange). If the buyer fails to submit any request with the specified time limit, the buyer shall be deemed to have not disputed the deliverable commodity, and the Exchange will no longer accept any request from the buyer disputing the deliverable commodity. However, if the second paragraph of this Article contain other provisions on any dispute over the quality or quantity of steel rebar, wire rod, and hot-rolled coil being delivered, such provisions shall apply.

CHAPTER 15   BLEACHED SOFTWOOD KRAFT PULP

     Article 109  Delivery Unit

     The delivery unit for bleached softwood kraft pulp (“BSKP”) futures is 20 ADMT per standard warrant. Delivery shall be made in multiples of the delivery unit.

     Article 110  The grade and quality specifications are provided in the Bleached Softwood Kraft Pulp Futures Contract Specifications of the Shanghai Futures Exchange.

     Article 111  Quality Standards

     Deliverable BSKP shall be genuine pulp of a certified brand from an SHFE-recognized manufacturer. The lists of certified brands and recognized manufacturers will be separately announced by the Exchange.

     Article 112  Packing and Stacking

     (i) The BSKP underlying each standard warrant shall comprise genuine pulp of the same brand and manufacturer.

     (ii) Deliverable BSKP shall meet the packaging requirements for goods of certified brands from SHFE-recognized manufacturers. The outer packaging of each bale shall conspicuously indicate the product name and other identifying information.

     (iii) BSKP shall arrive at a designated delivery storage facility in complete and clean packaging. The designated delivery storage facility shall check the whole shipment at acceptance, and shall refuse any commodity that is not fit for purpose due to obvious moisture, mold, contamination, serious physical damage, or other circumstances, and such commodity shall not enter the delivery process.

     (iv) Any commodity in designated delivery storage facility that has broken iron packaging wires or comes loose from the original packaging shall be tightly secured with specified iron wires before being cleared for delivery. The cost of repackaging shall be borne by the owner.

     (v) The deliverable BSKP underlying each standard warrant shall be stacked in storage areas which hold 500 metric tons each.

    Article 113   Required Documentation for Commodity for Delivery

     (i) Domestic commodity: the certificate of inspection issued by a designated inspection agency, the certificate of quality issued by the manufacturer, and other relevant materials. These documentations are valid only after being verified by the Exchange.

     (ii) Imported commodity: the certificate of inspection issued by a designated inspection agency; the customs declaration form, customs VAT collection form, certificate of origin, and certificate of quality covering the physical commodity in question; and other relevant materials. These documentations are valid only after being verified by the Exchange.

     If there is any change to national policies on taxation, quality inspection, or other pertinent areas, the updated policies shall prevail. Under such circumstances, the Exchange will separately announce the updated documentation requirement for imported commodity.

     Article 114 Load-In/Load-Out Inspection

     (i) BSKP arriving at a designated delivery storage facility shall be inspected by a designated inspection agency, which inspection consists of quality inspection and weight inspection. The results of quality inspection shall be as indicated by the quality inspection report issued by the designated inspection agency; a standard warrant may only be issued when the report indicates that the commodity meets the quality standards prescribed by the Exchange. The results of weight inspection shall be as indicated by the weight inspection report issued by the designated inspection agency. The owner shall ensure that the commodity loaded in is compliant with the quality standards prescribed by the Exchange.

     (ii) The commodity shall be inspected by a sampling inspection. The sampling location shall be within the designated delivery storage facility. Sampling at stations, docks, or from commodities in-transit is prohibited. The commodity covered by each bill of lading shall form one inspection lot. Each inspection lot shall consist of BSKP of the same certified brand and packaging specification.

     Article 115 Weight Differential and Weighing Error

     BSKP shall be delivered in air dry metric tons as measured. The difference between the standard warrant weight and actual delivery weight shall not exceed five percent (±5%), with a maximum weighing error of one percent (±1%).

     Article 116 Validity Period of Standard Warrant

     (i) Domestic BSKP is valid for delivery till the last delivery month of the following year after the year of manufacture, after which month the BSKP shall be converted spot product and the corresponding standard warrants shall be canceled.

     (ii) Imported BSKP shall be loaded into a designated delivery storage facility within six (6) months of its port arrival date, and is valid for delivery till the last delivery month of the second year after such date, after which month the BSKP shall be converted to spot product and the corresponding standard warrants shall be canceled.

     Article 117 Final settlement price of each BSKP futures contract shall be the volume-weighted average of all the execution prices of the contract over the last five (5) trading days on which it was traded.

     Within the delivery period, if such delivery procedures as the submission and receipt of standard warrant, special VAT invoice, and delivery payment are completed by 14:00, the Exchange will release the corresponding margin funds on the same day; if such procedures are completed after 14:00, the Exchange will do so on the following trading day.

     Article 119 Delivery venue: designated delivery storage facilities to be certified and separately announced by the Exchange.

Chapter 16Chapter 17     CHARGES AND FEES

     Article 121 Article 132  The parties to a physical delivery shall pay delivery fees to the Exchange based on the following rates: copper: two (2) yuan/metric ton; aluminum: two (2) yuan/metric ton; zinc: two (2) yuan/metric ton; steel rebar and wire rod: one (1) yuan/metric ton; natural rubber: four (4) yuan/metric ton; and lead, nickel, tin, silver, and hot-rolled coil, and BSKP: to be determined and separately announced by the Exchange.

     Article 123 Article 134  Among the services for which a designated delivery storage facility may charge are the following:

     (i)  load-in fees, load-out fees, handling fees, packaging fees, pick-up fees, ownership transfer fees, consignment fees, fast track fees, special working charges, and other charges recognized by the Exchange. The designated delivery storage facility shall present to the owner valid invoices that specify fees charged on the actual services provided. The owner shall, after verifying the accuracy of the invoices, pay them on a lump sum basis.

     (ii) warehousing fees shall be charged daily. The warehousing fees incurred prior to and including the last delivery day shall be borne by the seller, while the fees incurred thereafter shall be borne by the buyer. The designated delivery storage facility shall indicate the date of payment on the standard warrant after receiving the payment. The owner shall make the payment by the end of each month at the designated delivery storage facility. Advance payment is allowed.

     Charges and fees imposed by the designated delivery storage facility for copper, aluminum, zinc, lead, nickel, tin, steel rebar, wire rod, hot-rolled coil, natural rubber, and BSKP will be determined and separately announced by the Exchange.