Announcement on Promulgation of Bitumen (Futures) Inspection Rules of China Certification & Inspection Group Inspection Co., Ltd., National Quality Inspection Center for Road and Bridge and Inspection and Quarantine Technology Center of Ningbo Entry-Exit Inspection and Quarantine Bureau Technical Center of the P.R. China

China Certification & Inspection Group Inspection Co., Ltd., National Quality Inspection Center for Road and Bridge and Inspection and Quarantine Technology Center of Ningbo Entry-Exit Inspection and Quarantine Bureau Technical Center of the P.R. China are certified quality assayers for Bitumen Futures of Shanghai Futures Exchange.

Bitumen (Futures) Inspection Rules are formulated by China Certification & Inspection Group Inspection Co., Ltd., National Quality Inspection Center for Road and Bridge and Inspection and Quarantine Technology Center of Ningbo Entry-Exit Inspection and Quarantine Bureau Technical Center of the P.R. China in accordance with Bitumen Futures Standard Contracts of Shanghai Futures Exchange and Bitumen Futures Delivery Rules of Shanghai Futures Exchange (Trial) for the purpose of regulating the inspection for the physical delivery of Bitumen Penetration Grade 70 (Class A Road Grade).  After being filed at Shanghai Futures Exchange, these Rules shall hereby be put into effect.

China Certification & Inspection Group Inspection Co., Ltd., National Quality Inspection Center for Road and Bridge and Inspection and Quarantine Technology Center of Ningbo Entry-Exit Inspection and Quarantine Bureau Technical Center of the P.R. China will sincerely offer inspection services in an impartial and accurate manner to all parties involved in the trading of bitumen futures of Shanghai Futures Exchange.

China Certification & Inspection Group Inspection Co., Ltd.

National Quality Inspection Center for Road and Bridge

Inspection and Quarantine Technology Center of Ningbo Entry-Exit Inspection and Quarantine Bureau Technical Center of the P.R. China

Dated: September 23^rd, 2013

Bitumen (Futures) Inspection Rules

(Effective as of September 23^rd, 2013)

Chapter I General Provisions

Article 1 These Rules are formulated by the certified bitumen quality assayers of Shanghai Futures Exchange (“the certified quality assayers”).

Article 2 These Rules are formulated in accordance with relevant regulations of Shanghai Futures Exchange (“the Exchange”) for the purpose of ensuring the smooth operation of the inspection for the delivery of petroleum bitumen (“the bitumen”) futures of the Exchange, and regulating the inspection for the physical delivery of the same.

Article 3 Inspection for the physical delivery of bitumen futures contracts at the certified delivery warehouses or certified factory warehouses shall be subject to these Rules.

Article 4 Laboratories that assume the quality inspection for the certified quality assayers shall satisfy the relevant requirements set by national laws and regulations in terms of basic conditions and capabilities, and also acquire the relevant laboratory certifications and approvals.

Chapter II Load-in Inspection of Certified Delivery Warehouses

Article 5 Inspection authorization

5.1 The load-in inspection client (“the Client”) shall authorize the certified quality assayers in writing to conduct load-in inspection at least 24 hours prior to the load-in. In accordance with the sources of bitumen, the following documents shall be submitted:

(1) In case of imported bitumen by sea, the client shall provide relevant documents such as quality certificate, quantity certificate, B/L, customs declaration, load-in notice and certificate of origin;

(2) In case of domestic bitumen by ship, automobile or train, the client shall provide load-in notice and relevant documents to attest the source and quality of bitumen, including but not limited to the quality certificate of the producer and the factory shipping documents; and

(3) In case of physical bitumen stored at the shore tanks of certified delivery warehouses, the client shall apply to the certified delivery warehouse in writing for file prior to the load-in of bitumen to the shore tanks, and submit the documents as per the above (1) and (2) herein when applying for futures delivery load-in.

5.2 Certified quality assayers shall keep in close contact with the client and the certified delivery warehouse for the purpose of arranging the inspection based on the timely update of the development of delivery.

Article 6 Load-in inspection

6.1.1 Load-in weight inspection

In case of the bitumen by automobile, the weight certificate shall be issued as per the measurement of weighbridge; in case of the bitumen by train, the weight certificate shall be issued as per the measurement of any of the following: weighbridge, shore tank or rail weighbridge.

6.1.2 In case where the bitumen is transported through water and to the load-in shore tanks with effective capacity charts, the weight certificate shall be issued based on the measurement data of shore tanks, or as per the measurement data of cargo hold (calculated with the sampling density of cargo hold) if the said shore tanks do not have any effective capacity chart or measurement conditions prescribed by relevant inspection norms.

6.1.3 The temperature for the bitumen shall be maintained in a range that is no less than 130℃ and no more than 160℃ during the process of load-in.

6.2 Measurement of shore tanks

Certified quality assayers shall, prior to the load-in, confirm the arrival time, location and transportation mode of the bitumen to be delivered at the certified delivery warehouse with the client and the said certified delivery warehouse, and also check whether the pipe line purging equipment of the tanks area accords with technical requirements, whether the layout of pump area, valves and pipe line is well defined, and whether the valves can be sealed.

6.2.2 Certified quality assayers shall, prior to and subsequent to the unloading, keep abreast of the development on trapped oil of the pipe line so as to ensure that the pipe line remains unchanged. In particular, as for the tanks area with multiple tanks and pipelines, it shall also shut down and seal relevant tanks and valves to prevent the pipe lines and tanks from being mixed up.

6.2.3 Certified quality assayers together with the certified delivery warehouse and the client shall conform the inventory within the shore tank for load-in prior to the unloading.

6.2.4 Certified quality assayers shall, subsequent to the load-in, make sure that the static storage duration of bitumen is no less than 4 hours, and also check up the seals of the valves as well as the development on trapped oil of the pipe line.

6.2.5 Certified quality assayers shall, jointly with the certified delivery warehouse and the client, conduct the measurement of the shore tank after the load-in procedure.

6.2.6 Inspection method: SN/T 0993-2001.  

6.3 Measurement of cargo hold

6.3.1 Cargo hold shall satisfy the requirements provided by the transportation and measurement norms.

6.3.2 Certified quality assayers shall, jointly with the certified delivery warehouse and the client, conduct the measurement of the shipment loaded in the cargo hold prior to the unloading.

6.3.3 Certified quality assayers shall, jointly with the certified delivery warehouse and the client, conduct the inspection on the dry cargo hold after the unloading.

6.3.4 Inspection method: SN/T 0993-2001.

6.4 Measurement of shipment by automobile or train

6.4.1 Certified quality assayers shall, prior to the load-in, confirm the arrival time, location and operation method of the bitumen to be delivered at the certified delivery warehouse with the client and the said certified delivery warehouse, and identify the weighbridge, shore tank and rail weighbridge for use. In particular, it must perform different forms of testing and verification on all weighing apparatus for weighing checking as per relevant norms.

6.4.2 During the process of unloading and weighing, certified quality assayers shall conduct field supervision, and take photos for record (in strict compliance with the oil depot safety regulations).

It shall also collect the information on weighting and related data, make relevant records and calculated the quantity of load-in.

6.4.3 Inspection method for the measurement of shipment by automobile or train: SN/T0188.2-2010, SN/T 0188.3-2010 and SN/T 0188.4-2011; or SN/T0993-2001 if the applicant choose to apply the measurement of shore tanks to the weight inspection of the shipment by train.

6.5 Quality inspection

6.5.1 Quality inspection shall be subject to the sampling from the shore tanks. The samples shall be divided as follows: Sample A for assay, and Sample B for reference under seal. During the process of sampling, the temperature of bitumen shall be maintained within the range that is no less than 130℃ and no more than 160℃.

6.5.2 Sampling and testing methods shall be subject to the technical requirements of Bitumen Penetration Grade 70 (Class A Road Grade) provided in Standard Test Methods of Bitumen and Bituminous Mixtures for Highway Engineering (JTG E20-2011) by the Ministry of Transport of the P.R.China, and bitumen quality shall be in compliance with Technical Specification for Construction of Highway Asphalt Pavements (JTG F40—2004) by the Ministry of Transport of the P.R.China. See Bitumen Futures Quality Inspection Technical Requirements as per attached herein for details.

6.5.3 Classification of samples

(1)Sample A refers to the bitumen samples from the delivery tank after the load-in or before the load-out, among which Sample A1 is used for quality testing (1 Can), and Sample A2 for future reference (1 Can).

(2)Sample B refers to the bitumen sample from the delivery tank after the load-in or before the load-out, which is sealed up for potential disputes (1 Can).

6.5.4 Sampling: Certified quality assayers shall take necessary protective measures and conduct the sampling from the shore tanks jointly with the certified delivery warehouse and the client.

6.5.5 Quantity of samples:

Load-in or load-out will be respectively allocated as one batch in accordance with the quantity provided in the relevant Load-in Notice or Load-out Notice issued by the Exchange. While such a batch may be stored in one or multiple shore tanks, each shore tank shall be sampled as follows: one set of samples for 4L x 3 cans, which shall be under seal and indicated with A1, A2 and B, respectively.

6.5.6 Transmission and custody of samples

The said samples shall be sealed and stored at the location designated by certified quality assayers. And Sample A1 shall be picked up for the inspection.

6.5.7 Sample inspection procedure

(1) If Sample A1 passes, then the inspection will end, with an assay report issued;

(2) If Sample A1 fails, then the inspection will end, with an assay report issued;

(3) If Sample A1 fails and the parties involved dissent over such a result, then Sample A2 will be opened up for re-inspection of any item with dissent with an approval of SHFE. An assay report will be issued based on the result of re-inspected items of Sample A2, and the inspection will end; and

(4) If the parties involved still dissent over the re-inspection result of Sample A2, then Sample B will be opened up for inspection with an approval of the Exchange.  An assay report will be issued based on the result of Sample B, and the inspection will end.

Chapter III Load-out Inspection of Certified Delivery Warehouses

Article 7 Inspection authorization

7.1 In case where a quality inspection is necessary for the load-out bitumen, the client shall authorize the certified quality assayers of the Exchange in writing at least 24 hours prior to the load-out. For the purpose of such an authorization, the client shall provide the quantity of delivery cargo, while the certified delivery warehouse shall supplement relevant information such as the serial number(s) of storage tank(s). Certified quality assayers shall keep in close contact with the client and the certified delivery warehouse for the purpose of arranging the inspection based on the timely update of the development of delivery.

7.2 In case where a quality inspection is necessary for load-out bitumen of certified factory warehouse, it shall be subject to Bitumen Futures Delivery Rules of the Shanghai Futures Exchange (Trial) and these Rules.

Article 8 Load-out inspection

8.1 Load-out measurement

8.1.1 Measurement of load-out is subject to Article 6.1, 6.2, 6.3 and 6.4 of Chapter 2 hereof.

8.1.2 In case of the bitumen transported by ship, the quantity of bitumen from the load-out shore tanks shall be calculated with the density at 15℃ indicated in the quality certificate of the same batch of load-in with the consent of the certified delivery warehouse and the client. In addition, 1 can of reserved sample shall be taken from the shore tanks prior to the load-out.

8.2 Load-out quality inspection

8.2.1 Load-out quality inspection is subject to Article 6.5 of Chapter 2 hereof.

Chapter IV Assay Report

Article 9

Certified quality assayers shall issue the assay report within 5 working days after the samples are delivered at the laboratory.

Article 10

An assay report is divided into 2 sections, namely the weight report and the quality report, both of which shall be made in one origin plus three carbon copies.

Article 11

Sample B will be maintained by certified quality assayers for 3 months, and any sample with dissent will be preserved until such a dissent is solved.

Chapter V Supplementary Provisions

Article 12 These Rules shall be put into effect after being filed at Shanghai Futures Exchange.

Article 13 The interpretation of these Rules shall remain vested in Certified Quality Assayers of Shanghai Futures Exchange jointly.

Article 14 Matters not mentioned herein shall be subject to relevant provisions provided in Articles of Association, trading rules and implementing rules of Shanghai Futures Exchange.

Article 15 These Rules shall become effective as of the date of promulgation.

Appendix

Technical Requirements for Bitumen Futures Quality Inspection