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Updated on Dec 02,2013
SHANGHAI FUTURES EXCHANGE
Operation Manual for
Futures Contract Trade of Rebar, Wire Rod, Hot Rolled Coil and Steel
2014 Edition
Shanghai Futures Exchange
Operation Manual for
Futures Contract Trade of Steel
(2014 Edition)
The contents of this manual are for reference only. For the latest information, please consult the relevant departments of Shanghai Futures Exchange (Tel: +86-21-68400000) or visit the website of the Shanghai Futures Exchange (http://tsite.shfe.com.cn).
Contents
Overview on the Types of Rebar, Wire Rod and Hot Rolled Coil ………………….……………...4
Classification and Use of Rebar........................................................................................... 4
Classification and Use of Wire Rod...................................................................................... 5
Classification and Use of Hot Rolled Coil............................................................................. 7
National Standards and Quality Inspection of Steel................................................................ 8
Current Valid National Standards and Inspection of Rebar...................................................... 8
Current Valid National Standards and Inspection of Wire Rod................................................ 8
Currently Valid National Standards and Inspection of Hot Rolled Coil..................................... 9
Market Overview of Rebar, Wire Rod and Hot Rolled Coil.................................................... 9
Supply Situations and Characteristics of the Steel Market in China.......................................... 9
Demand Situations and Characteristics of the Steel Market in China...................................... 19
Market Demand Situations and Characteristics of Rebar and Wire Rod................................... 19
Market Demand and Characteristics of Hot Rolled Coil........................................................ 25
Analysis on the Import and Export of Steel Products in China.............................................. 30
Analysis on the Import and Export of Steel in China............................................................ 30
Analysis on the Import and Export of Rebar and Wire Rod................................................... 31
Import and Export of Hot Rolled Coil................................................................................ 33
Factors Affecting Steel Price in Market.............................................................................. 34
Main Factors Affecting Steel Price Change......................................................................... 34
Constitution of Cost of Steel............................................................................................. 38
Futures Standard Contract of Rebar, Wire rod and Hot Rolled Coil....................................... 40
Futures Standard Contract of Rebar in Shanghai Futures Exchange........................................ 40
Contract Appendix........................................................................................................... 41
Contract Appendix........................................................................................................... 43
Futures Guidelines and Related Regulations for Rebar, Wire Rod, and Hot Rolled Coil............ 46
Business Rules and Relevant Regulations of Shanghai Futures Exchange................................ 55
Appendices...................................................................................................................... 79
Classification and Use of Rebar
Rebar is the common name of hot-rolled ribbed bar. There are two common classification methods: first, classification based on the geometric shape, classification or type classification according to the section shape of horizontal rib and the spacing with the rib, for example, in British standards (BS4449), rebar is classified into Type I and Type II. Such mode of classification mainly reflects the gripping performance of rebar. Second, classified based on the performance, for
example, in
At present, the executive standard for rebar in
The grade number of plain hot-rolled ribbed bar is composed of HRB and characteristic value of yield strength; the grade number of fine-grain hot-rolled ribbed bar is composed of HRBF and characteristic value of yield strength. H, R and B are the initial English letters of Hot-rolled, Ribbed, Bars respectively; F is the initial English letter of Fine. The grade numbers of plain hot-rolled bar include HRB335, HRB400, HRB500; the grade numbers of fine-grain hot-rolled bar include HRBF335, HRBF400, HRBF500.
In addition, China GB 1499.2-2007 specifies the anti-seismic steel bar with relatively high requirements, whose identification of grade number is suffixed by E (for example, HRB400E, HRBF400E). Meeting all performance indexes of common steel bar as designated in the standard, anti-seismic steel bar shall meet the following three requirements:
1. The ratio of the measured tensile strength to the characteristic value of yield strength of anti-seismic steel bar shall not be less than 1.25;
2. The ratio of the measured yield strength to the characteristic value of yield strength of steel bar designated in the standard shall not be more than 1.30;
3. Maximum total elongation of steel bar shall not be less than 9%.
Rebar is widely used in the construction of civil works, such as house, bridge and road. It can be used in the public utilities, such as expressway, railway, bridge, culvert, tunnel, flood control and dam, and it is even the inevitable structural material for the foundation, beam, column, wall and plate of the house building. At present, high-strength rebar is widely promoted in
Classification and Use of Wire Rod
Wire rod refers to the steel delivered in coil after hot rolling with the wire rod rolling machine, generally with the diameter 5.5-14mm. Wire rod is mainly used for architectural and drawn steel wire and the products. Due to the need of the manufacturing of standard pieces, many cold-drawn blanks are directly supplied from wire rod because the wire rod is characterized by less drawing heads than that of vertical bar, strong continuity, and high pulling efficiency. Common wire rods mostly have round section, while the wire rod with irregular section is mostly in oval, rectangular and threaded shapes, but in very small manufacturing quantity.
Wire rod is classified into two types according to the production process. The wire rod manufactured with double rolling mill is called general wire, which has small rod weight, about 100-200kg, and poor dimensional precision, and is mainly used in the architectural industry. Double rolling mill is designed with the eliminated rolling process. High-speed wire rod rolling mills are longitudinally arranged, and the rolling pieces are rolled on the rolling mills. One rolling mill will roll only one run, and the turning number of the roller increases in proportion with the coefficient of elongation. The high-speed wire rod rolling mill has high rolling speed, up to 120m/s, high output, small head-tail temperature difference, high product dimension precision, high quality, and large rod weight, generally 1.5-2.0 ton. At present, the newly built wire rod rolling mills in
With the industrial development, wire rod is more and more widely used, and the quality requirements for wire rod are increasingly strict and professional. There are wide types of steel for wire rod, including carbon structural steel, spring steel, carbon tool steel, alloy structural steel, bearing steel, alloy tool
steel, stainless steel etc. The steel that shall be processed into wire will be mostly machined into wire rod with wire rod rolling mill and then drawn into wire. Since there are many steel types and steel numbers, wire rod is usually classified into five types in the manufacturing:
Wire rod for architectural use: is mainly used for the steel bar and welded structural member of reinforced concrete, and is one type of wire rod with the largest use, and grade number HPB300; executive standard is GB1499.1-2008 Steel for the reinforcement of concrete- Part 1: Hot-rolled plain bars.
Flexible wire: refers to common low-carbon steel hot-rolled round wire rod, with the grade number mainly including Q195, Q215, Q235 and Q275 designated in carbon structural steel standard as well as steel No. 10, 15 and 20 in quality carbon structural steel.
Hard wire: refers to wire rod of quality carbon structural steel type, such as the wire rod for the steel wire for wire rope making, and wire rod for making of steel wire for tyre. Hard wire generally has high carbon content, and generally refers to quality carbon structural steel above No. 45, 40Mn-70Mn, etc.
Bonding wire: refers to wire rod for welding, including carbon welding rod steel and wire rod for alloy welding rod steel.
Alloy steel wire rod: refers to various types of special wire rod with alloy steel and high alloy content, such as bearing steel wire rod, alloy structural steel, stainless steel, alloy tool steel wire rod, etc. Low-alloy steel wire rod is generally classified as hard wire, and may be classified as alloy steel type in case of any special performance.
Classification and Use of Hot Rolled Coil
Hot rolled coil is strip steel made with plate blank (mainly continuous casting blank) as the raw material, by rolling with roughing mill set and finishing mill set after the heating with heating oven (or uniform heating with uniform heating oven). Hot steel strip of hot rolled coil from the final rolling mill through finish rolling is cooled down to the set temperature through the laminar flow, for the making of hot-rolled steel strip by the coiling machine. Hot rolled coil includes the steel strip (coil) and the steel plate cut from steel strip (coil). Steel strip (coil) can be classified into direct-delivery coil and finishing coil (divided coil, leveling coil and longitudinal cut coil).
Hot rolled coil generally consists of medium-thickness wide steel strip, hot-rolled thin and wide steel strip and hot-rolled sheet. Medium-thickness wide steel strip is the most typical type, whose output accounts for about two thirds of total output of hot rolled coil, the object of the futures contract for hot rolled coil of Shanghai Futures Exchange to be listed belongs to medium-thickness wide steel strip.
Medium-thickness wide steel strip refers to the steel strip manufactured with continuous wide strip steel hot rolling machine or oven coil rolling mill and delivered in coil, with the thickness≥3mm and < 20mm, width≥600mm.
Hot-rolled thin and wide steel strip refers to steel strip manufactured with continuous wide strip steel hot rolling machine or oven coil rolling mill and delivered in coil, with the thickness<3mm and width≥600mm.
Hot-rolled sheet refers to the single steel sheet with the thickness <3mm. Hot-rolled sheet is usually steel strip manufactured with continuous wide strip steel hot rolling mill and sheet blank continuous casting equipment and delivered in coil.
Hot rolled coil may be classified into common structural carbon steel, low-alloy steel and alloy steel by the material and performance. It can be classified by category into cold-forming steel, structural steel, automotive structural steel, anti-corrosion structural steel, mechanical structural steel, steel for welding of gas cylinder and pressure
vessel, steel for pipeline, etc. Hot rolled coil product has high strength, good ductility, easiness for processing and forming and good weldability, and is widely used in the manufacturing
industries, such as cold-rolled substrate, ship, automobile, bridge, building, machinery, oil transmission pipeline, pressure vessel.
National Standards and Quality Inspection of Steel
The national standards for the rebar and the wire rod (plain steel bar) for architectural use are national mandatory standards; all the manufactured products shall comply with the related standards. National standards for wire rod and hot rolled coil other than for architectural use are recommendatory standards. During the manufacturing, the enterprises use the national standards, and some steel plants use industry standards or enterprise standard.
Current Valid National Standards and Inspection of Rebar
GB1499.1-2008 Steel for the Reinforcement of Concrete- Part 1: Hot Rolled Plain Bars
GB1499.1-2008 Steel for the Reinforcement of Concrete- Part 1: Hot Rolled Plain Bars- Modification list No. 1 for China National Standard
GB1499.2-2007 Steel for Reinforcement of Concrete –Part 2: Hot Rolled Ribbed Bar
GB/T1499.3-2002 Welded Steel Fabric for the Reinforcement of Concrete
Current Valid National Standards and Inspection of Wire Rod
For the wire rod (plain steel bar) for architectural use:
GB1499.1-2008 Steel for the Reinforcement of Concrete- Part 1: Hot Rolled Plain Bars
GB1499.1-2008 Steel for the Reinforcement of Concrete- Part 1: Hot Rolled Plain Bars- Modification list No. 1 for China National Standard
National standards and industry standards of wire rod other than for architectural use include:
GB/T14981-2009 Dimension, Shape, Mass and Tolerance for Hot Rolled Round Wire Rod
GB/T701-2008 Hot Rolled Low Carbon Steel Wire Rods
GB/T4354-1994 Hot Rolled Quality Carbon Steel Wire Rods
GB/T3429-2002 Steel Wire Coil for Welding
GB/T4241-2006 Stainless Steel Wire Rods for Welding
GB/T4356-2002 Stainless Steel Sire Rods
YB/T146-1998 Hot Rolled Wire Rods for Prestressed Steel Wires and Wire Ropes
YB/T170.1-2000 Non-alloy Steel Rods for Conversion to Wire- Part 1: General Requirements
YB/T170.2-2000 Non-alloy Steel Rods for Conversion to Wire- Part 2: Specific Requirements for General Purpose Wire Rod
YB/T170.3-2002 Non-alloy Steel Rods for Conversion to Wire- Part 3: Specific Requirements for Rimmed and Rimmed-substitute Low Carbon Steel Wire Rod
YB/T170.4-2002 Non-alloy Steel Rods for Conversion to Wire- Part 4: Specific Requirements for Wire Rod for Special Applications
YB/T5100-1993 Piano Wire Rods
YB/T5365-2006 Hot Rolled Wire Rod for Quenched and Tempered Springs (former GB/T19530-2004)
Currently Valid National Standards and Inspection of Hot Rolled Coil
GB/T247—2008 General Rule of Package, Mark and Certification for Steel Plates (sheets) and Strips
GB/T709—2006 Dimension, Shape, Weight and Tolerances for Hot-rolled Steel Plates and Sheets
GB/T710—2008 Hot Rolled Quality Carbon Structural Steel Sheets and Strips
GB/T711—2008 Hot-rolled Quality Carbon Structural Steel Plates, Sheets and Wide Strips
GB912—2008 Hot Rolled Sheets and Strips of Carbon Structural Steel and High-strength Low-alloy Structural Steel
GB/T3274—2007 Hot Rolled Plates and Strips of Carbon Structural Steel and High-strength Low-alloy Structural Steel
GB/T4237—2007 Hot Rolled Stainless Steel Plate, Sheet and Strip
GB/T20887.1—2007 Continuously Hot Rolled High Strength Steel Sheet and Strip for Automobile--Part 1: High Yield Strength Steel for Cold Forming
GB/T20887.2—2010 Continuously Hot Rolled High Strength Steel Sheet and Strip for Automobile--Part 2: High Hole Expansion Steel
GB/T20887.3—2010 Continuously Hot Rolled High Strength Steel Sheet and Strip for Automobile --Part 3: Dual Phase Steel
GB/T20887.4—2010 Continuously Hot Rolled High Strength Steel Sheet and Strip for Automobile --Part 4: Transformation Induced Plasticity Steel
GB/T20887.5—2010 Continuously Hot Rolled High Strength Steel Sheet and Strip for Automobile --Part 5: Martensitic Steel
GB/T8749—2008 Hot Rolled Quality Carbon Structural Steel Strips
GB/T14164-2005 Hot Rolled Wide Strips for Line Pipe of Petroleum and Natural Gas
Supply Situations and Characteristics of the Steel Market in
Output Supply Situations and Characteristics of Crude Steel and Steel in
Before the financial crisis in 2008, crude steel and steel in
Output and growth of crude steel and steel in
Source: National Bureau of Statistics of the People’s Republic of
The provinces and municipalities with the largest crude steel output in
Crude steel outputs of top 10 provinces and municipalities in
|
No. |
Provinces and municipalities |
2011 |
2012 |
Growth rate % |
2013 |
Growth rate % |
|
1 |
|
16999.5 |
18048.4 |
6.2 |
18849.6 |
3.5 |
|
2 |
|
6868.6 |
7419.7 |
8 |
8469.1 |
10.6 |
|
3 |
|
5840.3 |
5957 |
2 |
6119.8 |
2.7 |
|
4 |
|
5314 |
5177 |
-2.6 |
5972.9 |
15.4 |
|
5 |
|
3610.2 |
3950.1 |
9.4 |
4519.6 |
14 |
|
6 |
|
2937.3 |
2806.7 |
-4.4 |
2887.8 |
0.3 |
|
7 |
|
2395.4 |
2215.8 |
-7.5 |
2736 |
19.4 |
|
8 |
|
2076.5 |
2147 |
3.4 |
2351.5 |
9.5 |
|
9 |
|
2295.7 |
2124.2 |
-7.5 |
2289.5 |
7.8 |
|
10 |
|
2085.4 |
2140.9 |
2.7 |
2156.6 |
0.8 |
|
Other provinces and municipalities |
19058.3 |
19667.4 |
3.2 |
21551.7 |
8.3 |
|
|
Total |
69481.2 |
71654.2 |
3.1 |
77904.1 |
7.5 |
|
Source: National Bureau of Statistics of the People’s Republic of
The provinces and municipalities with the highest steel output in
Steel output of top ten provinces and municipalities in
|
No. |
Provinces and municipalities |
2011 |
2012 |
Growth rate % |
2013 |
Growth rate % |
|
1 |
|
19189.5 |
20995.2 |
9.4 |
22861.6 |
8.7 |
|
2 |
|
10008.3 |
10989.2 |
9.8 |
12398 |
12.7 |
|
3 |
|
7176.5 |
7817.9 |
8.9 |
8109.1 |
4.6 |
|
4 |
|
5890.6 |
5916.1 |
0.4 |
6863 |
15.3 |
|
5 |
|
5093.9 |
5708.6 |
12.1 |
6640.9 |
15.4 |
|
6 |
|
3397.4 |
3797.6 |
11.8 |
4486.2 |
18.1 |
|
7 |
|
3293.7 |
3481.4 |
5.7 |
4255.2 |
18.7 |
|
8 |
|
3178.2 |
3361.3 |
5.8 |
3823.4 |
13.1 |
|
9 |
|
2912 |
2993 |
2.8 |
3384.5 |
12.3 |
|
10 |
|
3665.2 |
3558.4 |
-2.9 |
3344.9 |
-5.8 |
|
Other provinces and municipalities |
24610.3 |
26567.4 |
8 |
30595.4 |
13.1 |
|
|
Total |
88415.6 |
95186.1 |
7.7 |
106762.2 |
11.4 |
|
Source: National Bureau of Statistics of the People’s Republic of
Market Supply Situations and Characteristics of Rebar and Wire Rod
Except for the influence of international financial crisis in 2008, the output of rebar and wire rod in
Rebar output and growth in
Source: National Bureau of Statistics of the People’s Republic of
Wire rod output and growth in
Source: National Bureau of Statistics of the People’s Republic of
The provinces and municipalities with highest rebar output in
Output of rebar in top 10 provinces and municipalities in
|
No. |
Provinces and municipalities |
2011 |
2012 |
Growth rate % |
2013 |
Growth rate % |
|
1 |
|
2184.9 |
2775.8 |
27 |
3037.1 |
9.4 |
|
2 |
|
1757.5 |
2089.9 |
18.9 |
2451.8 |
15.6 |
|
3 |
|
1015.3 |
1059.9 |
4.4 |
1370.2 |
-2.3 |
|
4 |
|
882.2 |
1000.2 |
13.4 |
1271.3 |
25.2 |
|
5 |
|
898.7 |
1047.4 |
16.5 |
1231.1 |
21.2 |
|
6 |
|
839.3 |
889.6 |
6 |
1016.8 |
12.2 |
|
7 |
|
657.1 |
783.9 |
19.3 |
954.2 |
21.7 |
|
8 |
|
464.8 |
550.2 |
18.4 |
904.3 |
23.8 |
|
9 |
|
639.5 |
726.5 |
13.6 |
853.4 |
17.1 |
|
10 |
|
637.7 |
798.3 |
25.2 |
809.9 |
1.5 |
|
Other provinces and municipalities |
5279.3 |
5816 |
10.2 |
6719.1 |
15.0 |
|
|
Total |
15256.3 |
17537.7 |
15 |
20619.2 |
13.8 |
|
Source: National Bureau of Statistics of the People’s Republic of
The provinces and municipalities with highest wire rod output in China are Hebei, Shanxi and Jiangsu respectively, the wire rod output in 2013 was 27.302 million ton, 18.205 million ton and 14.793 million ton respectively, accounting for 18.1%, 12.1% and 9.8% of national wire rod output respectively, in which Shanxi wire rod output achieved high growth rate, and rose to No. 2 nationwide beyond Jiangsu Province in 2013. The wire rod output of top 10 provinces and municipalities was 111.899 million ton, accounting for 74.2% of total national wire rod output. Refer to the table below for the wire rod output of top 10 provinces and municipalities in
Output of wire rod for top 10 provinces and municipalities in
|
No. |
Provinces and municipalities |
2011 |
2012 |
Growth rate % |
2013 |
Growth rate % |
|
1 |
|
2410.2 |
2793.4 |
15.9 |
2730.2 |
-1.7 |
|
2 |
|
993.5 |
1280.4 |
28.9 |
1820.5 |
42.2 |
|
3 |
|
1365.7 |
1330.5 |
-2.6 |
1479.3 |
11.2 |
|
4 |
|
848 |
1015.4 |
19.7 |
1160.0 |
13.4 |
|
5 |
|
781.5 |
849.3 |
8.7 |
969.0 |
14.5 |
|
6 |
|
681.7 |
664.1 |
-2.6 |
750.5 |
13.0 |
|
7 |
Guangxi |
318.5 |
482.8 |
51.6 |
617.8 |
28.0 |
|
8 |
|
340.4 |
415.4 |
22 |
569.0 |
15.5 |
|
9 |
|
586.7 |
527.3 |
-10.1 |
567.3 |
8.0 |
|
10 |
|
391.1 |
436.6 |
11.6 |
525.3 |
20.3 |
|
Other provinces and municipalities |
3435.5 |
3820.9 |
11.2 |
3900.4 |
-0.3 |
|
|
Total |
12152.8 |
13616.1 |
12 |
15089.3 |
9.6 |
|
Source: National Bureau of Statistics of the People’s Republic of
Rebar and wire rod have low concentration and full market competition
Regional characteristics highlight low production capacity of rebar and wire rod in
According to the incomplete statistics of SteelHome website, more than 220 iron and steel enterprises in
Top 10 iron and steel enterprises on the output of rebar in
|
No. |
Iron and steel enterprise |
2009 |
Iron and steel enterprise |
2013 |
|
1 |
836.6 |
|
1080.3 |
|
|
2 |
|
821.7 |
1014.7 |
|
|
3 |
|
686.9 |
1013.6 |
|
|
4 |
Jiangsu Shagang Group Co., Ltd. |
679.1 |
|
813.8 |
|
5 |
516.8 |
743.2 |
||
|
6 |
472.0 |
Shougang Group |
694.8 |
|
|
7 |
368.3 |
600.2 |
||
|
8 |
333.8 |
Baosteel Group Corporation |
582.2 |
|
|
9 |
305.2 |
559.2 |
||
|
10 |
289.9 |
|
551.8 |
|
|
|
Total of top ten |
5310.3 |
Total of top ten |
7653.8 |
|
National output |
12150.6 |
National output |
20619.2 |
|
|
Percentage of top 10 |
43.7% |
Percentage of top 10 |
37.1% |
Source:
Top 10 iron and steel enterprises on the output of wire rod in
|
No. |
Iron and steel enterprise |
2009 |
Iron and steel enterprise |
2013 |
|
1 |
Jiangsu Shagang Group Co., Ltd. |
648.5 |
Jiangsu Shagang Group Co., Ltd. |
817.3 |
|
2 |
|
532.6 |
|
599.7 |
|
3 |
|
356.3 |
|
409.8 |
|
4 |
Baosteel Group Corporation |
346.8 |
Fangda Iron and Steel Group Co., Ltd. |
372.1 |
|
5 |
Shougang Group |
345.8 |
|
334.9 |
|
6 |
342.0 |
296.1 |
||
|
7 |
323.8 |
Baosteel Group Corporation |
286.9 |
|
|
8 |
247.6 |
266.5 |
||
|
9 |
Pingxiang Iron and Steel Co., Ltd. |
247.0 |
Xingtai Iron & Steel Corp., Ltd. |
258.3 |
|
10 |
244.8 |
250.7 |
||
|
|
Total of top ten |
3635.3 |
Total of top ten |
3892.3 |
|
National output |
9585.7 |
National output |
15089.3 |
|
|
Percentage of top 10 |
37.9% |
Percentage of top 10 |
25.8% |
Source:
Market Supply Situations and Characteristics of Hot Rolled Coil
Since 2005, growth rate of hot rolled coil output in
Hot rolled coil output and growth in
Source: National Bureau of Statistics of the People’s Republic of
From the output of provinces and municipalities, the provinces and municipalities with the highest hot rolled coil output in
Top 10 provinces and municipalities with the highest hot rolled coil output in
|
No. |
Provinces and municipalities |
2011 |
2012 |
Growth rate % |
2013 |
Growth rate % |
|
1 |
|
5136.1 |
5332.1 |
3.8 |
5728.5 |
6.9 |
|
2 |
|
1859.1 |
1901.5 |
2.3 |
2195.7 |
15.5 |
|
3 |
|
1394.6 |
1679.2 |
20.4 |
1752.7 |
4.4 |
|
4 |
|
1123.7 |
1381.2 |
22.9 |
1380.4 |
-0.1 |
|
5 |
|
845.7 |
783.4 |
-7.4 |
932.3 |
13.1 |
|
6 |
|
584.4 |
594.9 |
1.8 |
639.4 |
7.5 |
|
7 |
|
582.9 |
607.8 |
4.3 |
636.9 |
4.8 |
|
8 |
|
549.6 |
534.7 |
-2.7 |
551.2 |
3.1 |
|
9 |
|
604.4 |
495.9 |
-18 |
513.2 |
2.8 |
|
10 |
Guangxi |
406.5 |
534.8 |
31.6 |
423.2 |
-1.6 |
|
Other provinces and municipalities |
2560 |
2844.4 |
11.1 |
3517.2 |
23.8 |
|
|
Total |
15647 |
16689.9 |
6.7 |
18270.7 |
9.7 |
|
Source: National Bureau of Statistics of the People’s Republic of
The concentration of the production capacity of hot rolled coil is relatively high
From the concentration of production capacity, the concentration of production capacity of hot rolled coil is obviously higher than that of rebar and wire rod. But from 2009 to 2013, the percentage of the output of top 10 steel plants in hot rolled coil (commodity wire rod) in
Output of hot rolled coil of top 10 iron and steel enterprises in
|
No. |
Iron and steel enterprise |
2009 |
Iron and steel enterprise |
Year 2013 |
|
1 |
Anshan-Benxi Iron and Steel Group |
1372.2 |
Baosteel Group Corporation |
1407.2 |
|
2 |
Baosteel Group Corporation |
1150.6 |
|
1375.2 |
|
3 |
|
840.8 |
|
1076.4 |
|
4 |
|
700.4 |
|
1009.7 |
|
Rizhao Steel Holding Group Co., Ltd. |
539.2 |
1000.8 |
||
|
6 |
|
537.5 |
Shougang Group |
963.2 |
|
7 |
Jiangsu Shagang Group Co., Ltd. |
493.3 |
854.6 |
|
|
8 |
Handan Zongheng Iron & Steel Group Co., Ltd. |
482.9 |
Jiangsu Shagang Group Co., Ltd. |
841.7 |
|
9 |
343.8 |
|
523.5 |
|
|
10 |
|
276.6 |
485.7 |
|
|
|
Total of top ten |
6737.3 |
Total of top ten |
9537.8 |
|
National output |
11994.2 |
National output |
18270.7 |
|
|
Percentage of top 10 |
56.2% |
Percentage of top 10 |
52.2% |
Source:
Market Demand Situations and Characteristics of Rebar and Wire Rod
Rebar is one of the steel types with the largest output in
Comparison of the bar resource supply and investment growth rate in 2005- July, 2013
Source: National Bureau of Statistics of the People’s Republic of
The sales of rebar and wire rod mainly depend on the market circulation, and the price is basically close to that in the non-futures market
The sales of rebar in
Same as that for rebar, the sales of wire rod in
Sales of rebar by key enterprises by channels in 2010-2013 (Unit: 10,000 tons)
|
Rebar |
2010 |
2011 |
2012 |
January-November, 2013 |
|
Sales |
8654.0 |
9917.0 |
11607.1 |
12436.6 |
|
Where, direct delivery |
1625.7 |
2202.0 |
2420.5 |
2689.3 |
|
Percentage |
18.8% |
22.2% |
20.9% |
21.6% |
|
Branch |
1136.4 |
1231.1 |
1253.0 |
1551.2 |
|
Percentage |
13.1% |
12.4% |
10.8% |
12.5% |
|
Circulation |
5827.5 |
6429.9 |
7745.5 |
7969.6 |
|
Percentage |
67.3% |
64.8% |
66.7% |
64.1% |
|
Export |
64.4 |
54.0 |
188.2 |
226.5 |
|
Percentage |
0.7% |
0.5% |
1.6% |
1.8% |
Source:
Sales of wire rod by key enterprises by channels in 2010-2013 (Unit: 10,000 tons)
|
Wire rod |
2010 |
2011 |
2012 |
January-November, 2013 |
|
Sales |
6074.0 |
6474.2 |
6564.1 |
6542.5 |
|
Where, direct delivery |
1962.1 |
2122.3 |
2014.7 |
1939.1 |
|
Percentage |
32.3% |
32.8% |
30.7% |
29.6% |
|
Branch |
746.1 |
631.1 |
534.6 |
738.3 |
|
Percentage |
12.3% |
9.7% |
8.1% |
11.3% |
|
Circulation |
3160.9 |
3479.0 |
3631.0 |
3417.8 |
|
Percentage |
52.0% |
53.7% |
55.3% |
52.2% |
|
Export |
204.9 |
241.9 |
383.8 |
447.2 |
|
Percentage |
3.4% |
3.7% |
5.8% |
6.8% |
Source:
Seasonal change of rebar and wire rod, winter storage and north-south transportation are the obvious characteristics in the winter sales
The production and sales of various types of steel had the conflict between continuous product and phase demand, but more obvious in the architectural steel mainly reflected by rebar and wire rod. In every winter, the construction sites in the northeast, northwest and northern
Change of rebar inventory in main domestic markets in 2010-2013 (Unit: 10,000 tons)
Source: SteelHome
Change of wire rod inventory in main domestic markets in 2010-2013 (Unit: 10,000 tons)
Source: SteelHome
Eastern China is the largest rebar production and consumption region in
Eastern China is the largest rebar production and consumption region in
According to the statistical data of China Iron and Steel Association (CISA), the rebar output of key enterprises in January-November, 2013 was 124.366 million ton, in which the output flowing to
Distribution of the zones for rebar output in
Source: National Bureau of Statistics of the People’s Republic of
Distribution of the zones flow for rebar in
Source:
Northern China is the largest wire rod production region and Eastern China is the largest wire rod consumption region in
Eastern China is the largest wire rod consumption region in
Distribution of the zones for wire rod output in
Source: National Bureau of Statistics of the People’s Republic of
Distribution of the zones flow for wire rod in key enterprises in January-November, 2013
Source:
Market Demand and Characteristics of Hot Rolled Coil
Coil sheet maintained rapid growth
Since 2005, the growth rate of hot rolled coil output in
Hot rolled coil and its output and growth by specification in
|
Type |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
|
Hot-rolled coil |
Output |
5192 |
6820.2 |
8651.7 |
9959.1 |
11994.2 |
14669.8 |
15714 |
16689.9 |
|
Growth rate % |
36.1 |
32.4 |
35.3 |
13.1 |
17.8 |
19.4 |
4.6 |
6.7 |
|
|
Hot-rolled coil sheet |
Output |
1485 |
2305.3 |
2353.7 |
2594.6 |
3610.5 |
4380.6 |
5210.2 |
5823.7 |
|
Growth rate % |
30.9 |
61.7 |
27 |
4 |
30.3 |
18.3 |
19 |
19.5 |
|
|
Medium-thickness steel strip |
Output |
3707.1 |
4514.8 |
6298 |
7364.47 |
8383.8 |
10289.2 |
10503.8 |
10866.2 |
|
Growth rate % |
38.3 |
21.2 |
38.7 |
16.7 |
13.2 |
19.9 |
-1.3 |
0.8 |
Source: National Bureau of Statistics of the People’s Republic of
Export has certain effect on mitigating the domestic supply-demand conflict
Before 2005, the hot rolled coil in
Northern China is the largest hot rolled coil manufacturing region in
Northern China is the largest hot rolled coil manufacturing region in
With respect to the consumption region,
Distribution of the zones for the hot rolled coil output in 2013
Source: National Bureau of Statistics of the People’s Republic of
Distribution of the zones flow for hot rolled coil in key enterprises in January-November, 2013
Source:
Direct delivery percentage of hot rolled coil increased gradually, and circulation percentage decreased
In recent years, direct delivery percentage of hot rolled coil in
Sales of hot rolled coil by channels in 2005 - January-November, 2013 (Unit: 10,000 tons)
|
Hot rolled coil |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
January-November, 2013 |
|
Sales |
4368.7 |
5307.3 |
7036.6 |
7703.8 |
5277.1 |
10820.1 |
10634.7 |
11129.7 |
11667.4 |
|
Direct delivery |
727.9 |
1630.6 |
2331.7 |
2249.7 |
1548.4 |
3587.7 |
4033.6 |
4026.8 |
4460.3 |
|
Percentage |
16.7% |
30.7% |
33.1% |
29.2% |
29.3% |
33.2% |
37.9% |
36.2% |
38.2% |
|
Branch |
684.9 |
741.3 |
1209.3 |
1397.1 |
1061.4 |
1708.5 |
1819.0 |
1919.8 |
1600.7 |
|
Percentage |
15.7% |
14.0% |
17.2% |
18.1% |
20.1% |
15.8% |
17.1% |
17.2% |
13.7% |
|
Circulation |
2635.0 |
2253.0 |
2656.1 |
3121.2 |
2565.0 |
4778.9 |
4372.0 |
4632.9 |
5111.9 |
|
Percentage |
60.3% |
42.5% |
37.7% |
40.5% |
48.6% |
44.2% |
41.1% |
41.6% |
43.8% |
|
Export |
320.9 |
682.3 |
839.6 |
935.9 |
102.4 |
744.9 |
410.2 |
550.2 |
494.5 |
|
Percentage |
7.3% |
12.9% |
11.9% |
12.1% |
1.9% |
6.9% |
3.9% |
4.9% |
4.2% |
Source:
Introduction of main downstream industries of hot rolled coil
Hot rolled coil is widely used in the manufacturing industries, such as cold-rolled substrate, ship, automobile, bridge, building, machinery, oil transmission pipeline and pressure vessel.
(1) Deep processing industry of hot rolled coil
Deep processing of hot rolled coil mainly involves the hot-rolled coil sheet with the thickness≤3.0mm, and is used for cold-rolled coil plate substrate, hot-rolled pickled plated and hot-rolled galvanized plate, etc.
Cold-rolled coil plate substrate is one of the main uses of hot rolled coil. The use of hot rolled coil after the cold rolling mainly includes the deep processed products, such as cold-rolled commodity coil and coated plate and electrical steel.
The demand of hot-rolled pickled coil mainly concentrates in automobile industry, compressor industry, mechanical manufacturing industry, parts and component processing industry, fan industry, motorcycle industry, steel household furniture, hardware, electric cabinet frame, and the stamping in various shapes.
The substrate of hot-rolled galvanized plate is hot rolled coil. Since cold rolling is omitted, it has the obvious cost advantage over the hot-dip galvanized plate, thus having strong market competitiveness, and capable of partly replacing the demand of hot-dip galvanized plate with thick specification.
(2) Structural steel
Structural steel is one of the main uses of hot rolled coil. The downstream industries include architectural steel structure, machinery industry, automobile, petroleum and natural gas.
In the architectural industry, hot-rolled structural steel is directly used for the fabrication of steel structure and frame, and hot rolled coil is also used in large amount as the substrate for the fabrication of cold-bent section steel and welding of steel pipe.
(3) Structural steel for hull
Hot rolled coil is also widely used as structural steel for hull, mainly for the manufacturing of the steel plates for the hulls and decks of the ships for marine, coastal and inland water transportation. Due to harsh working environment of the ships, the hull of the ship will be subject to the chemical corrosion of seawater, electrochemical corrosion, corrosion from marine life and microorganism; the hull will undertake large wind and wave impact and variable loads; the ship shape makes the machining method complex. So the hull structure raises strict requirements for steel.
(4) Steel for pressure vessel (boiler)
There are high requirements on steel for pressure vessel (boiler), mainly because the vessels will undertake different pressures and strengths. According to the work conditions and machining process of the vessel, the steel plate for the vessel shall have good cold bending and welding performance, good plasticity and ductility, and high-temperature short-time strength or long-term strength performance. Steel plates for pressure vessel are mainly used for the manufacturing of the vessels or other similar equipment in the petroleum, chemical, power station, boiler, gas separation and storage industries, such as various tower vessels, storage tank, ball tank, oil and gas tank, liquefied natural gas tank, liquefied petroleum gas cylinder and tanker; heat exchanger of boiler, reactor, boiler drum, heat exchanger, separator, high-pressure water pipe of power station, water turbine volute, superheater, main steam pipe and the heating surface of boiler fire chamber.
(5) Steel for bridge
In
(6) Weathering resistance, steel for corrosion-resistant structure
Continuous hot rolled steel strip resisting atmospheric corrosion, resisting sulfuric acid dew-point corrosion and seawater corrosion, the steel plate from horizontal cutting and the longitudinal cut steel strip, are used for the manufacturing of container, rolling inventory, oil derrick, seaport building, oil production platform and the structural components, such as the vessel containing the hydrogen sulfide corrosion medium in chemical and petroleum equipment.
(7) Steel for petroleum and natural gas transmission pipe
Steel for petroleum and natural gas transmission pipe is also one of the main use fields of hot rolled coil, particularly West-East Gas Pipeline Project motivated the growth of steel demand for pipeline.
(8) Structural steel for automobile
In the steel for automobile, the use of steel plates, including cold rolled plate and hot rolled plate, accounts for more than 50% of steel for automobile, in which hot rolled coil is widely used for freight car and passenger vehicle, mainly in the longitudinal beam and horizontal beam of the frame, horizontal beam of carriage and wheel of the lorry. High-strength hot-rolled plate is more and more widely used.
Analysis on the Import and Export of Steel in
2005 was the line of demarcation for the import and export of steel in
Import and export of steel in
|
Steel |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
|
Import |
2581.6 |
1851.0 |
1687.3 |
1538.7 |
1764.0 |
1642.9 |
1562.9 |
1362.1 |
1408 |
|
Export |
2052.3 |
4300.7 |
6269.4 |
5918.3 |
2457.7 |
4244.7 |
4897.0 |
5560.2 |
6234 |
|
Net export |
-529.4 |
2449.7 |
4582.1 |
4379.6 |
693.7 |
2601.8 |
3334.1 |
4198.1 |
4826 |
|
Domestic output |
37117.0 |
46685.4 |
56460.8 |
58177.3 |
69243.7 |
79627.4 |
88131.3 |
95186.1 |
106762 |
|
Export percentage |
5.5% |
9.2% |
11.1% |
10.2% |
3.5% |
5.3% |
5.6% |
5.8% |
5.8% |
Source: General Administration of Customs
Import and export of steel in
Source: General Administration of Customs
Analysis on the Import and Export of Rebar and Wire Rod
The export of rebar in
The export of wire rod in
Import and export of rebar in
|
Rebar |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
|
Import |
8.8 |
6.3 |
5.0 |
2.5 |
5.6 |
5.3 |
5.2 |
7.1 |
6.1 |
|
Export |
174.4 |
373.9 |
590.8 |
116.8 |
30.5 |
22.5 |
22.4 |
26.2 |
27.2 |
|
Net export |
165.6 |
367.6 |
585.8 |
114.3 |
24.9 |
17.2 |
17.2 |
19.2 |
21.1 |
|
Outpour |
6776.5 |
8303.8 |
10136.6 |
9709.0 |
12150.6 |
13096.4 |
15405.6 |
17537.7 |
20619.2 |
|
Export percentage |
2.6% |
4.5% |
5.8% |
1.2% |
0.3% |
0.2% |
0.1% |
0.1% |
0.1% |
Source: National Bureau of Statistics of the People’s Republic of
Import and export of rebar in
Source: General Administration of Customs
Import and export of wire rod in
|
Wire rod |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
|
Import |
68.0 |
70.6 |
61.4 |
52.1 |
50.9 |
65.4 |
66.6 |
43.8 |
54.1 |
|
Export |
320.4 |
555.4 |
623.9 |
505.6 |
108.2 |
234.9 |
300.8 |
559.6 |
800.5 |
|
Net export |
252.4 |
484.9 |
562.5 |
453.5 |
57.3 |
169.4 |
234.2 |
515.8 |
746.4 |
|
Outpour |
6051.1 |
7151.0 |
8038.2 |
8024.0 |
9585.7 |
10552.8 |
12259.1 |
13616.1 |
15089.3 |
|
Export percentage |
5.3% |
7.8% |
7.8% |
6.3% |
1.1% |
2.2% |
2.5% |
4.1% |
5.3% |
Source: National Bureau of Statistics of the People’s Republic of
Import and export of wire rod in
Source: General Administration of Customs
Import and Export of Hot Rolled Coil
Before 2005, hot rolled coil in
Import and export of hot rolled coil in
|
Hot rolled coil |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
|
Import |
581.6 |
350.9 |
226.9 |
179.3 |
440.0 |
230.0 |
196.2 |
199.5 |
244.4 |
|
Export |
404.0 |
855.5 |
1004.5 |
1054.9 |
376.8 |
881.9 |
526.3 |
618.1 |
662.9 |
|
Net export |
-177.6 |
504.7 |
777.6 |
875.6 |
-63.3 |
651.8 |
330.1 |
418.6 |
418.5 |
|
Output |
5192 |
6820 |
8652 |
9959 |
11994 |
14670 |
15714.0 |
16689.9 |
18270.7 |
|
Export percentage |
7.8% |
12.5% |
11.6% |
10.6% |
3.1% |
6.0% |
3.3% |
3.7% |
3.6% |
Source: General Administration of Customs
Import and export of hot rolled coil in
Source: General Administration of Customs
Development of Steel Trading and Logistics Industry in
Before 2003, the demand of the steel market in
From 2003, the steel logistics financing in the commercial banks in
In about 2008, the local governments generally took modern logistic park construction as the important project for business and investment invitation. Domestic real estate market saw explosive growth, and the steel trading enterprises were gradually “transformed”, investing the fund obtained through the financing for steel trading into the real estate projects. The financing-based demand in the domestic steel market increased largely. The steel financing-based demand objectively enlarged the demand in the domestic steel market, resulting in the deviation of the steel plant production from actual demand. The plant price was “inversely pegged” with the market in the long term, and inventory in the domestic steel market remained at the high level.
After 2009, the credit business of domestic commercial banks increased largely, and the commercial banks universally considered the steel logistics financing business with high importance, thus non-standard operations increased. On April 26th, 2012, General Office of China Banking Regulatory Commission issued Notice on guarding against the use of the bank loans from the steel trading enterprises through defrauding into high-risk industries, requiring the commercial banks to strengthen the approval of the loans to steel trading enterprises and the supervision on the loan flow. Thus financing demand in domestic steel market was curbed.
Main Factors Affecting Steel Price Change
2005-2013 Market Price Status of Rebar, Wire Rod, and Hot Rolled Coil
For the 2005-2013 domestic price change of rebar, wire rod, and the hot rolled coil in market, please see the following figure. Features of the price change in general are as follows:
Market price fluctuates drastically. In February 2006, main domestic market prices of 20mm level-3 rebar, 6.5mm ordinary line, and 5.75 mm*1,500 hot rolled coil were respectively: 3,103Yuan/ton, 3,017 Yuan/ton, and 3,045 Yuan/ton; to June 2008, the prices rose to respectively: 5,865 Yuan/ton, 5,978 Yuan/ton, and 5,973 Yuan/ton, which means respective rise of 2,762 Yuan/ton, 2,961 Yuan/ton, and 2,928 Yuan/ton, hitting increase of 89%, 98.1%, and 96.2%. After the break-out of international financial crisis, the steel price encountered panic steep fall. To October 2008, for minimum fall, the average prices of 20mm level-3 rebar, 6.5mm ordinary line, and 5.75 mm*1500 hot rolled coil respectively down to: 3,709 Yuan/ton, 3,446 Yuan/ton, and 3,068 Yuan/ton. Compared with highest prices in June, the rate of fall reached 36.8%, 42.4% and 48.6%.
Before the break-out of 2008 financial crisis, the market price of hot rolled coil was commonly higher than prices of rebar and wire rod, especially in former part of 2007 and March of 2005, domestic 5.75mm*1500 hot rolled coil average price hit 5,360 Yuan/ton, for which, compared with same period of Φ20mmHRB400 rebar andΦ6.5mm high line maximum average prices of 4,058 Yuan/ton and 3,912 Yuan/ton, it was respective 1,302 Yuan/ton and 1,448 Yuan/ton higher. After the financial crisis, being driven by investment demand, the construction steel material average price is higher than the average price of hot rolled coil.
Steel price fluctuation period is shorted and the range is reduced. After 2009, the steel market price fluctuation period and range reduced obviously. And sharp change is merely seen. The situation became more obvious in market after 2011. For the first three quarters of 2011 and the period from the end of November 2011 to May 2012, as well as May 2013 to December 2013, market price fluctuation range is only between 200 Yuan/ton. The main reason is that domestic steel industry gradually enters overall surplus phase, steel merchant lacks of fund, and market trading is not active. All these reasons limit the market price fluctuation range.
2005-2013 Shanghai market hot rolled coil and rebar price (Unit: Yuan/ton)
|
Source: SteelHome
Main Factors Affecting Steel Price of Domestic Market
Supply-demand relation of steel market decides tendency of price
Supply-demand relation decides pricing tendency. Before 2008, domestic hot rolled coil were of great demand so that the market price was once higher than the rebar and wire rod. With the rapid increase of domestic hot rolled coil output, the conflict of supply and demand is eased, and the market price difference with other types is gradually decreased. According to the data of Steel Home, average price of main domestic market in 2005 of 5.75mm*1500* hot rolled was 4081 Yuan/ton, for which, compared with price of level-3 20mm rebar that year, it was 573 Yuan/ton higher, and compared with price of wire rod price that year, it was 675 Yuan/ton higher. After that, the price difference has been gradually decreased. Especially, after the financial crisis of 2008, huge investment of our nation drives demand increase of rebar and wire rod. The average price of rebar has become higher than that of the hot rolled coil. In 2011, average price of rebar was 220 Yuan/ton higher than that for hot rolled coil. But with the ever intense situation of rebar output surplus, the price of rebar and the price of hot rolled coil get gradually close. And up to 2013, the average price of the whole year of hot rolled coil had become higher than the average price of rebar. Please see the following table.
2005-2013 Average prices and price difference of hot rolled coil and rebar, wire rod (Unit: Yuan/ton)
|
Year |
5.75mm*1500 hot rolled coil |
HRB400 rebar |
HPB235 wire rod |
Difference of hot rolled coil and rebar |
Difference between hot rolled coil and wire rod |
|
2005 |
4081 |
3508 |
3406 |
573 |
675 |
|
2006 |
3719 |
3198 |
3225 |
521 |
494 |
|
2007 |
4149 |
3821 |
3746 |
328 |
403 |
|
2008 |
4949 |
4946 |
4872 |
3 |
77 |
|
2009 |
3661 |
3863 |
3678 |
-202 |
-17 |
|
2010 |
4292 |
4360 |
4266 |
-68 |
26 |
|
2011 |
4721 |
4941 |
4823 |
-220 |
-102 |
|
2012 |
4042 |
4070 |
4022 |
-28 |
20 |
|
2013 |
3734 |
3654 |
3607 |
80 |
127 |
Source: SteelHome
Upstream and downstream cost restricts the
Cost decides the maximum and minimum values of price. And supply-demand relation decides price tendency, but cannot be extended without limit. To be simple, the cost of downstream industry decides upmost price of steel. When downstream industry cost cannot afford steel price rise and encounters deficit, the market price would turn from rising to falling. And the average production cost of steel industry decides lower limit of steel price. When steel factory meets deficit widely, potential for market price fall would not be large.
Domestic market fund supply decides steel price level
Fund decides steel price level. If the market fund is comparatively sufficient, it usually is accompanied with high price; but if the fund is tight, it usually is accompanied with low price. Taking period of 2011-2012 for instance, since the bank tightened up loan, steel merchants usually encountered tight fund, or some of them even had broken fund chain, especially for the 2012 break-out of steel trading credit crisis. It results in tight fund in industry which makes market price be kept in low level.
Analysis on domestic market competition situation
Impact of domestic market competition on market price is indispensable. Different structures of factories select different strategies, which decide different states of the market competition.
Taking rebar and hot rolled coil for instance: observing from the national market that, the rebar market is basically belong to complete competition state. No steel plant in domestic area could be called dominated factory. Only part of regional dominating factories exists. For example, Hebei Iron and Steel Group Co., Ltd. to
Hot rolled coil are different. Since its sales semi-diameter is comparatively large, and products concentration is high, besides the regional dominating steel factory price policy, steel merchants also care about large scale steel factory price policy adjustment. For example: Shagang Group Co., Ltd. and Rizhao Iron & Steel Group are regional dominating steel factories, and mainly take Eastern China as sales region. But merchants also care adjustment of price policies of Baosteel Group Corporation, Anshan Iron and Steel Group Corporation, Wuhan Iron and Steel (Group) Corp., as well as Hebei Iron and Steel Group Co., Ltd.. Especially Baosteel, though its hot rolled coil circulation volume at market is not large, its price policy adjustment still has obvious impact of guide on other factories and markets. However, with surplus output of the nation becomes more and more obvious, steel enterprises profits decrease sharply commonly or even become deficit. Long-distance transport disadvantage is becoming more and more serious. For example: if hot rolled coil of North China and northeast part of China need to be sold in east part of China, it would be at disadvantage on transport cost. Taking Shanghai market for instance: automobile transport or railway transport cost for North China region is commonly between 120-200 Yuan/ton, the cost for water transport of northeast part of China region is 120-150 Yuan/ton, but the cost for Eastern China region is only 50 Yuan/ton. Under the condition that common steel factories only win micro profits, the hot rolled coil factories are also shrinking their sales semi-diameter and taking strategy of regional sale as core, assisting with middle/long-distance sale in the expectation of getting good profits.
Market expectation’s function of promoting to price fluctuation
Market expectation has the function magnifying. It can promote price fluctuation range by changing supply-demand relation and market fund status. If market expectation to future price is rise, dealers would usually positively warrant and increase inventory, then the market fund would also be greatly increased; meanwhile, the increase of market inventory also drives rise of demand and stipulates market price to further rise up; vice versa.
Impact of financial market and bulk commodity market to steel price
Since the steel futures, iron ore futures, coke futures, and coking coal futures enter into market, domestic steel products are of more metal attribute. The steel industry chain is comparatively seriously affected by financial market and bulk commodity market fluctuation. Futures market and non-futures market are both contacted and competed, which increases uncertainty factors to steel market. Futures market has certain impact on non-futures market tendency. Non-futures market can better visually reflect the change of market tendency. Forward market shock and non-futures market compose mutually restricted balance. And meanwhile, it also becomes a key factor to be considered for steel factory pricing. Viewing from rebar futures and non-futures market price tendency, futures price and non-futures price have strong relativity. See the following figure.
2009-2013 rebar futures and non-futures prices comparison (Unit: Yuan/ton)
|
Source: SteelHome
The cost of the steel consists of raw material cost, energy cost, labor cost, depreciation and finance cost, etc.
Constitution of Cost of Iron-making
The production cost of process of iron-making mainly consists of raw materials (pellet, iron ore, etc.), auxiliary materials (limestone, dolomite, refractory, etc.), fuel and power (coke, powdered coal, gas, oxygen, water, electricity, etc.), direct wages and benefits, manufacturing costs, cost deduction (gas recovery, water slag recycling, recycling of screen underflow of coke, etc.) According to the principle of the blast furnace smelting, producing 1 ton of pig iron needs 1.5 ton to 2.0 ton of iron ore, 0.4 ton to 0.6 ton of coke and 0.2 ton to 0.4 ton of flux.
The main factor that affects the total cost in the process of iron making is the cost of raw materials (iron ore, coke), and other expenses, including auxiliary materials, fuel, labor costs, which are only about 10% of the total costs after offsetting with the by-product recovery.
Production cost of pig iron = (1.6×iron ore+0.5×coke)/0.9
Constitution of Cost of Steelmaking
The production cost of steelmaking mainly consists of pig iron, scrap steel, alloy, electrode, refractory materials, auxiliary materials, electricity, maintenance and inspection, and other expenses. The main steel-making process is the converter steelmaking in our country, and the general configuration should be 10% to 15% of the scrap steel.
With the increase of power consumption, the addition of alloy and the increase of maintenance cost, with the exception of the cost of main raw materials, the other costs is about 18% of the total cost.
Manufacturing cost of a t of crude steel = (0.96×pig iron+0.15×scrap steel)/0.82
The Cost of Steel Rolling
The production cost of steel rolling process (hot rolling) is mainly composed of gas, electric energy, and roll loss and so on. The rolling of cost of different varieties is slightly different between 150 and 300 Yuan/ton.
Sample of Estimation of Steel Cost
For example, on August 26th, 2013, the price of raw materials in Hebei-66% iron fine power, 1,080 Yuan/ton; Grade II metallurgical coke, 1,330 Yuan/ton; steel scrap, 2,540 Yuan/ton:
Manufacturing cost of a t of pig iron = (1.6×1,080+0.5×1,330)/0.9=2,659 Yuan/t
Manufacturing cost of a t of crude steel = (0.96×2,659+0.15×2,540)/0.82=3,577 Yuan/t
Manufacturing cost of HRB400 rebar = 3,577+150+100=3,827 Yuan/ton (the cost of rebar rolling is about 150 Yuan, and the cost of alloy is about 100 Yuan)
Manufacturing cost of HPB300 high speed wire rod = 3,577+150+70=3,797 Yuan/ton (the cost of high speed wire rod rolling is about 150 Yuan/ton, and the cost of alloy is about 70 Yuan/ton)
Manufacturing cost of Q235 traditional continuous hot rolled coil = 3,577+300=3,877 Yuan/ton (the cost of rolling of traditional continuous hot rolled coil is about 300 Yuan, and the sheet bar continuous casting and rolling cost is lower about 100 Yuan/ton)
Futures Standard Contract of Rebar in
The text of contract
|
Trading products |
Rebar |
|
Trading unit |
10 tons / lot |
|
Price quotation |
Yuan (RMB) per ton |
|
Minimum price fluctuation |
1 Yuan/ton |
|
Maximum daily price fluctuation |
No more than ±3% of the settlement price on the previous trading day |
|
Contract delivery months |
From January to December |
|
Trading hours |
From 9:00 to 11:30 in the morning, from 1:30 to 3:00 in the afternoon |
|
Last trading day |
On the 15th day of the contract delivery months (it will postponed in the case of legal holidays) |
|
Delivery period |
Five consecutive days after the end of the transaction |
|
Grade of delivery |
Standard:Φ16mm,Φ18mm,Φ20mm,Φ22mm and Φ25mm rebar marked with HRB400 or HRBF400 in line with the national standard GB1499.2-2007 Steel for the Reinforcement of Concrete-Part 2: Hot Rolled Ribbed Bars Substitute:Φ16mm,Φ18mm,Φ20mm,Φ22mm and Φ25mm rebar marked with HRB335 or HRBF335 in line with the national standard GB1499.2-2007 Steel for the Reinforcement of Concrete-Part 2: Hot Rolled Ribbed Bars. |
|
Delivery venue |
Delivery warehouse designated by the Exchange |
|
Minimum trading margin |
5% of contract value |
|
The smallest Unit of delivery |
300 t |
|
Settlement type |
Physical delivery |
|
Product symbol |
RB |
|
Listed exchange |
Shanghai Futures Exchange |
I. Delivery Unit
The trading Unit of rebar futures standard contract is 10 t/ lot, and the delivery Unit is 300 ton /warrant. The delivery shall be according to the integer multiples of each warrant.
II. Quality requirements
(1) The quality of rebar for physical delivery shall conform to the relevant regulations of HRB400, HRBF400, HRB335 and HRBF335 of the national standard GB1499.2-2007 Steel for the reinforcement of concrete-Part 2: Hot rolled ribbed bars.
(2) The dimensions, shape, weight and tolerances, packing, marking and quality certificate of delivery rebar shall conform to the regulations of the national standard GB1499.2-2007 Steel for the reinforcement of concrete-Part 2: Hot rolled ribbed bars.
(3) The length of rebar for physical delivery is 9 meters and 12 meters cut-length.
(4) The rebar of each standard warrant shall consist of goods produced by the same manufacturer, have the same brand, the same registered trademark, the same nominal diameter and the same length. And the production date of rebar in each warrant shall not be more than 10 consecutive days[1], and the earliest date shall be the production date of this warrant.
(5) The rebar of each warrant should be the registered brand approved by the Exchange, and accompanied by the corresponding quality certificate.
(6) The delivery of rebar shall be measured with the actual weight. The goods of each warrant shall not exceed 3% more or less, and the pounds difference shall be no more than ± 0.3%.
(7) The warehouse warrant shall be issued by the designated delivery warehouse upon the acceptance of according to regulations.
III. Production companies and registered brands approved by the Exchange
The rebar for physical delivery should be the brands registered in the Exchange. The specific registered brand and premium and discount standard shall be separately prescribed and announced by the Exchange.
IV. Designated delivery warehouse
The delivery warehouse shall be separately designated and announced by the Exchange. The premium and discount standard of remote delivery warehouse shall be designated and announced by the Exchange.
Futures Standard Contract of Wire Rod in
The Text of Contract
|
Trading products |
Wire rod |
|
Trading unit |
10 tons / lot |
|
Price quotation |
Yuan (RMB)/ ton |
|
Minimum price fluctuation |
1 Yuan/ton |
|
Maximum daily price fluctuation |
No more than ±5% of the settlement price on the previous trading day |
|
Delivery months |
From January to December |
|
Trading hours |
From 9:00 to 11:30 in the morning, from 1:30 to 3:00 in the afternoon |
|
Last trading day |
On the 15th day of the contract delivery months (it will postponed in the case of legal holidays) |
|
Delivery period |
Five consecutive days after the end of the transaction |
|
Grade of delivery |
Standard：Φ8mm wire rod marked with HPB235 in line with the national standard GB1499.1-2008 Steel for the Reinforcement of Concrete-Part 1: Hot Rolled Plain Bars Substitute: Φ6.5mm wire marked with HPB235 in line with the national standard GB1499.1-2008 Steel for the Reinforcement of Concrete-Part 1: Hot Rolled Plain Bars |
|
Delivery venue |
Delivery warehouse designated by the Exchange |
|
Minimum trading margin |
7% of the contract value |
|
Transaction fees |
No more than two-ten thousandth of a turnover (including the risk reserve) |
|
The smallest Unit of delivery |
300 t |
|
Settlement type |
Physical delivery |
|
Product symbol |
WR |
|
Listed exchange |
Shanghai Futures Exchange |
I. Delivery unit
The trading Unit of wire rod futures standard contract is 10 t/ lot, and the delivery Unit is 300 t /warrant. The delivery shall be according to the integer multiples of each warrant.
II. Quality requirements
(1) The quality of wire rod for physical delivery shall conform to the relevant regulations of HPB235 in the national standard GB1499.1-2008 Steel for the Reinforcement of Concrete-Part 1: Hot Rolled Plain Bars.
(2) The dimensions, shape, weight and tolerances, packing, marking and quality certificate of delivery wire rod shall conform to the regulations of the national standard GB1499.1-2008 Steel for the Reinforcement of Concrete-Part 1: Hot Rolled Plain Bars.
(3) The wire rod of each standard warrant shall consist of goods produced by the same manufacturer, and have the same brand, the same registered trademark, the same nominal diameter and the same length. And the production date of wire in each warrant shall not be more than 2 consecutive days, and the earliest date shall be the production date of this warrant.
(4) The wire rod of each warrant should be the registered brand approved by the Exchange, and accompanied by the corresponding quality certificate.
(5) The delivery of wire shall be measured with the actual weight. The goods of each warrant shall not exceed 3% more or less, and the pounds difference shall be no more than ± 0.3%.
(6) The warehouse warrant shall be issued by the designated delivery warehouse upon the acceptance of according to regulations.
III. Production companies and registered brands approved by the Exchange
The wire rod for physical delivery should be the brands registered in the Exchange. The specific registered brand and premium and discount standard shall be separately prescribed and announced by the Exchange.
IV. Designated delivery warehouse
The delivery warehouse shall be separately designated and announced by the Exchange. The premium and discount standard of remote delivery warehouse shall be designated and announced by the Exchange.
Futures Standard Contract of Hot Rolled Coil in
The Text of Contract
|
Trading products |
Hot rolled coil |
|
Trading unit |
10 tons / lot |
|
Price quotation |
Yuan (RMB)/ ton |
|
Minimum price fluctuation |
2 Yuan/ton |
|
Maximum daily price fluctuation |
No more than ±3% of the settlement price on the previous trading day |
|
Delivery months |
From January to December |
|
Trading hours |
From 9:00 to 11:30 in the morning, from 1:30 to 3:00 in the afternoon, and other times provided by the Exchange. |
|
Last trading day |
On the 15th day of the contract delivery months (it will postponed in the case of legal holidays) |
|
Delivery period |
Five consecutive days after the end of the transaction |
|
Grade of delivery |
Standard: the hot rolled coil shall conform to Q235B of the national standard GB/T3274-2007 Hot Rolled Plates and Strips of Carbon Structural Steels and High Strength Low-alloy Structural Steel or SS400 of JIS G 3101-2010 Rolled Steel for General Structure with the thickness of 5.75mm and width of 1,500mm. Substitute: the hot rolled coil shall conform to Q235B of the national standard GB/T3274-2007 Hot Rolled Plates and Strips of Carbon Structural Steels and High Strength Low-alloy Structural Steel, or SS400 of JIS G 3101-2010 Rolled Steel for General Structure with the thickness of 9.75mm, 9.5mm, 7.75mm, 7.5mm, 5.80mm, 5.70mm, 5.60mm, 5.50mm, 5.25mm, 4.75mm, 4.50mm, 4.25mm, 3.75mm, 3.50mm and width of 1,500mm. |
|
Delivery venue |
Delivery warehouse designated by the Exchange |
|
Minimum trading margin |
4% of the contract value |
|
Settlement type |
Physical delivery |
|
Product symbol |
HC |
|
Listed exchange |
Shanghai Futures Exchange |
Contract Appendix
I. Delivery unit
The trading Unit of hot rolled coil futures standard contract is 10 t/ lot, and the delivery Unit is 300 ton /warrant. The delivery shall be according to the integer multiples of each warrant.
II. Quality requirements
(1) The quality of hot rolled coil for physical delivery shall be stipulated as in the following:
1. Standard
The hot-rolled coil shall conform to Q235B of the national standard GB/T3274-2007 Hot Rolled Plates and Strips of Carbon Structural Steels and High Strength Low-alloy Structural Steel, or SS400 of JIS G 3101-2010 Rolled Steel for General Structure with the thickness of 5.75mm and width of 1,500mm.
2. Substitute
The hot rolled coil shall conform to Q235B of the national standard GB/T3274-2007 Hot Rolled Plates and Strips of Carbon Structural Steels and High Strength Low-alloy Structural Steel, or SS400 of JIS G 3101-2010 Rolled Steel for General Structure with the thickness of 9.75mm, 9.5mm, 7.75mm, 7.5mm, 5.80mm, 5.70mm, 5.60mm, 5.50mm, 5.25mm, 4.75mm, 4.50mm, 4.25mm, 3.75mm, 3.50mm and width of 1,500mm.
(2) Other requirements separately designated and announced by the Shanghai Futures Exchange for Delivery Details of Shang Futures Exchange.
III. Production companies and registered brands approved by the Exchange
The hot rolled coil for physical delivery should be the brands registered in the Exchange. The specific registered brand shall be separately prescribed and announced by the Exchange.
IV. Designated delivery warehouse
The delivery warehouse shall be separately designated and announced by the Exchange.
V. Additional explanation
This standard contract shall be interpreted by the Shanghai Futures Exchange.
Entry Trading Flow Chart
Client Entry Trading Flow Chart
Trading and Clearing Flow Chart
Key Regulations for Trading Risk Control
Physical Delivery Flow Chart
1. Standard Warrant Generation
Standard Warrant Generation Flow Chart
2. Delivery Flow
Delivery Flow Chart
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Pickup of Delivery
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Warehouse Warrant Stock-out Flow Chart
EFP Flow Chart
Notes:
1. Application period for handling EFP: from the day of EFP contract listing to last two trading days before delivery month (including trading day).
2. EFP is applicable for historical positions rather than newly-opened positions on application day.
3. EFP delivery and settlement price: negotiated price agreed by Buyer and Seller Member (Client).
Hedging Flow Chart
* When hedging positions are approved, positions shall be established prior to the closing of the third trading day before the last trading day of the contract involved with such hedging.
* Hedging trading positions shall not be reused since the first trading day of the delivery month.
* When hedging in nearby month is not approved, Min (Hedging positions in general month and speculative position limit quota).
Business Rules and Relevant Regulations of
Highlights of Trading Rules
(1) Trading seat is a channel used by member to input trading instructions into computer trading system of the Exchange to participate in centralized auction trading. Trading seat falls into floor trading seat and remote trading seat.
After obtaining membership of the Exchange, member shall have a floor trading seat.
Remote trading seat refers to a trading mode that member takes advantage of electronic communication system networked with computer trading system of the Exchange at business premise to directly input trading instructions and participate in centralized auction trading in the Exchange.
The rights and obligations of remote trading seat shall be the same as those of floor trading seat.
(2) Trading instruction falls into limit price instruction, cancellation instruction and other instructions prescribed by the Exchange. The maximum quantity of limit price instruction shall be 500 lots every time. For trading instruction, the minimum quantity of order should be 1 lot, and quotation shall be within the price fluctuation limits. Other instructions include two new types of trading instructions, i.e., Fill or Kill (FOK) and Fill and Kill (FAK).
(3) The Exchange shall implement trading ID filing system. Trading ID refers to specific code dedicated to futures trading between member and client, which falls into Non-FF member ID and client ID.
(4) The Exchange shall provide member, client and social public with futures trading information on instant, daily, weekly, monthly and yearly basis. Such information shall cover commodity name, delivery month, latest price, price change, volume, positions, change in positions, price of application for buying, price of application for selling, quantity of application for buying, quantity of application for selling, trading volume of every deal, settlement price, opening price, closing price, the highest price, the lowest price, pre-settlement price and so on.
All members, information management agencies, public media and individuals shall be not allowed to publish false or misleading information.
Highlights of Detailed Rules for Settlement
Settlement refers to business activity of calculating and allocating member’s trading margin, profit and loss, fee, delivery payment and other related funds in accordance with trading results and relevant provisions of the Exchange.
(1) Routine settlement
1. The Exchange shall a dedicated settlement account in futures margin depository bank for depositing Member’s margin and related funds. Member must open dedicated fund account in the futures margin depository bank for depositing margin and related funds. The Exchange shall implement management of differential accounts for margin deposited by Member into dedicated account of the Exchange.
2. The Exchange shall implement settlement system of Daily Mark-to-Market. In other words, after closing of daily trading, the Exchange shall settle profit and loss, trading margin of all contracts, commission, taxes and other expenses according to intraday settlement price, make one-off transfer of accounts payable and accounts receivables by net amount, and correspondingly increase or decrease settlement reserve for member.
3. Adding margin: After closing of daily trading, if settlement reserve after the settlement is less than the minimum balance, Member is required to make additional funding before AM 8:30 on the next trading day. If Member fails to do so and settlement reserve balance is greater than zero and below the minimum balance of settlement reserve, member shall be prohibited to open new positions. If the settlement reserve is less than zero, the Exchange will launch “Mandatory Liquidation” in accordance with the relevant provisions.
(2) Marketable securities
With approval of the Exchange, member can offset the margin with marketable securities, but the loss, expense, tax and other payments shall be settled with monetary funds. Client shall deposit securities under the entrustment of FF member.
When FF member offsets the margin with marketable securities for client, it shall present Client’s Special Letter of Entrustment affixed with Client’s signature. If Client’s standard warrant is used to offset margin, client shall authorize member in standard warrant management system and submit such authorization to the Exchange.
The business of offsetting margin with marketable securities shall be handled by clearing institution of the Exchanges, the deadline for handling this business is closing of daily trading every day. Under special circumstances, the Exchange can postpone the handling deadline.
1. The types of marketable securities:
Standard Warrant: Paper standard warrant shall not be used to offset the margin. Member or client shall undergo the formalities of recovering paper standard warrant back to an electronic form before offsetting margin;
Other marketable securities identified by the Exchange
2. Formalities of offsetting margin with marketable securities
Application
For the business of offsetting margin with marketable securities, member shall apply to the Exchange. When member offsets margin with marketable securities, it shall also submit Client’s Special Letter of Entrustment affixed with client’s signature. If client’s standard warrant is used to offset margin, client shall authorize member in standard warrant management system and submit such authorization to the Exchange.
Verification and deposit
With approval of the Exchange for application, member, who offsets the margin with standard warrant, shall submit standard warrant in electronic form to the Exchange via standard warrant management system. The Exchange shall handle deposit procedures (Please refer to Standard Warrant Management Measures of Shanghai Futures Exchange for the specific operational methods).
Verification and deposit of other marketable securities shall comply with the regulations of the Exchange.
3. Calculation methods of securities
Where standard warrant is used to offset the margin, its market value shall be calculated on the basis of the intraday settlement price of futures contract by product in latest delivery month (as benchmark price), and the amount for offsetting the margin shall be at most 80% of market value of standard warrant. The amount for offsetting the margin, resulting from discounted market value of marketable securities, is referred to as “discount amount”.
Benchmark price for other marketable securities to offset the margin shall be specified by the Exchange.
In daily settlement of the Exchange, the above methods shall be adopted to re-fix benchmark price of marketable securities and adjust discount amount.
Highlights of Risk Control Management Measures
(1) Margin system
1. Implementation of trading margin system in the Exchange
Trading margin refers to member’s funds of its account in the Exchange for fulfilling the contract, which is occupied by contract. Minimum trading margin of rebar futures contract, wire rod futures contract and hot rolled coil futures contract shall be 5%, 7% and 4% of contract value, respectively.
2. Margins for different quantity of positions in the futures contract and different stages of listing operation
According to different quantity of positions in a certain futures contract of rebar and wire rod and different stages of listing operation (from quotation day of such a new contract to the last trading day), the Exchange shall develop different fee scales for trading margin.
Fee scale of trading margin for hot rolled coil shall not be adjusted in echo with changes in quantity of positions of a certain futures contract (i.e., when quantity of positions changes, fee scale for trading margin shall remain unchanged). The Exchange shall develop different fee scale of trading margin according to the different stages of listing operation for Hot-rolled Coil futures.
Specific provisions are formulated as follows:
Fee scale for trading margin under changes in quantity of positions of rebar futures contract
|
Since the first trading day of the last third month before delivery month, when total open interest (X) meets the following criteria |
Percentage of trading margin for rebar |
|
X≤1.2 million |
5% |
|
1.2 million＜X≤1.35 million |
7% |
|
1.35 million＜X≤1.5 million |
9% |
|
X＞1.5 million |
11% |
Note: X represents the total dual-sided position of contract in a certain month (Unit: lots).
Fee scale for trading margin under changes in quantity of positions of wire rod futures contract
|
Since the first trading day of the last third month before delivery month, when total open interest (X) meets the following criteria |
Percentage of trading margin for wire rod |
|
X≤450,000 |
7% |
|
450,000＜X≤600,000 |
8% |
|
600,000＜X≤750,000 |
10% |
|
X＞750,000 |
12% |
Note: X represents the total dual-sided position of contract in a certain month (Unit: lots).
Total open interest of rebar (10,000 lots)
Total open interest of wire rod (10,000 lots)
In the trading process, when positions of a certain futures contract reaches total open interest, fee scale for trading margin shall be temporarily not adjusted. At the time of intraday settlement, when positions of a certain futures contract reaches total open interest, the Exchange shall charge trading margin corresponding to total open interest positions according to all positions of such a contract. In case of in adequate margin, the gap arising therefrom shall be filled before the opening of the next trading day.
The Exchange shall adjust trading margin methods according to different stages of listing operation of futures contracts (near the settlement period).
Fee scale for trading margin at different stages of listing operation of rebar futures contract
|
Trading phase |
Proportion of rebar trading margin |
|
Contract listing |
5% |
|
As of the first trading day of the first month prior to the delivery month |
10% |
|
As of the first trading day of the delivery month |
15% |
|
As of the second trading day prior to the last trading day |
20% |
Fee scale for trading margin at different stages of listing operation of wire rod futures contract
|
Proportion of wire rod trading margin |
|
|
Contract listing |
7% |
|
As of the first trading day of the first month prior to the delivery month |
10% |
|
As of the first trading day of the delivery month |
15% |
|
As of the second trading day prior to the last trading day |
20% |
Fee scale for trading margin at different stages of listing operation of hot rolled coil futures contract
|
Trading phase |
Proportion of wire rod trading margin |
|
Contract listing |
4% |
|
As of the first trading day of the first month prior to the delivery month |
10% |
|
As of the first trading day of the delivery month |
15% |
|
As of the second trading day prior to the last trading day |
20% |
When rebar, wire rod or hot rolled coil futures contract meet the criteria for adjustment of trading contracts, when implementing previous trading day settlement according to new criteria, the Exchange shall settle all historical positions of such a contract according to new trading margin criteria. In case of in adequate margin, the gap arising therefrom shall be filled before the opening of the next trading day.
3. After entering the delivery month, seller can use the standard warrant as compliance assurance for positions of futures contract with the same quantity delivery month. Trading margin corresponding to positions shall no longer be charged.
4. Where fee scale for trading margin is otherwise adjusted by Shanghai Futures Exchange. Notice and announcement shall prevail.
(2) The upper/lower price limit system
The upper/lower price limit system refers to the maximum daily price fluctuations permitted by futures contracts. Quotation beyond price limit shall be deemed as invalid and shall not be available for trading.
The upper/lower price limit of rebar and hot rolled coil futures contract shall be at most ±3% of previous day’s settlement price. The upper/lower price limit of wire rod futures contract shall be at most ±5% of the previous day’s settlement price. The Exchange can adjust magnitude of the upper/lower price limit in view of market risk.
Market closing at the upper/lower price limit for consecutive trading days without continuous quotation (hereinafter referred to as “one-sided market”) refers to that a futures contract sees declaration for buy (sell) at circuit breakers price within five minutes before a trading day closes without declaration for circuit breakers-priced sell (buy); or deal is done under declaration for sell (buy) without opening circuit breakers price. In case of market closing at the upper/lower price limit in the same direction for two consecutive trading days without continuous quotation, this is referred to as “one-sided market in the same direction”. In case of market closing at the upper/lower price limit in the opposite direction in the next trading day without continuous quotation this is referred to as “one-sided market in the opposite direction”. When a futures contract consecutively sees one-sided market in the same direction, adjustment of price limit and fee scale for trading margin of such a futures contract are listed in the following table:
Adjustment of upper/lower price limit and fee scale for trading margin of rebar futures contract in case of one-sided market in the same direction for consecutive trading days
|
|
Contract criterion |
D1 Trading Day |
D2 Trading Day |
D3 Trading Day |
D4 Trading Day |
|
Upper/lower price limit |
3% |
3% |
3%+3%=6% |
3%+5%=8% |
Suspending trading |
|
Trading margin at the time of closing and settlement |
5% |
6%+2%=8% |
8%+2%=10% |
8%+2%=10% |
Adjustment of upper/lower price limit and fee scale for trading margin of wire rod futures contract in case of one-sided market in the same direction for consecutive trading days
|
|
Contract criterion |
D1 Trading Day |
D2 Trading Day |
D3 Trading Day |
D4 Trading Day |
|
Upper/lower price limit |
5% |
5% |
5%+3%=8% |
5%+5%=10% |
Suspending trading |
|
Trading margin at the time of closing and settlement |
7% |
8%+2%=10% |
10%+2%=12% |
8%+2%=10% |
Adjustment of upper/lower price limit and fee scale for trading margin of Hot-rolled Coil futures contract in case of one-sided market in the same direction for consecutive trading days
|
|
Contract criterion |
D1 Trading Day |
D2 Trading Day |
D3 Trading Day |
D4 Trading Day |
|
Upper/lower price limit |
3% |
3% |
3%+3%=6% |
3%+5%=8% |
Suspending trading |
|
Trading margin at the time of closing and settlement |
4% |
6%+2%=8% |
8%+2%=10% |
8%+2%=10% |
Note: When D3 Trading Day or D4 Trading Day is the last trading day, risk control management measures are separately developed as follows.
When a futures contract sees one-sided market in the same direction on D3 Trading day (i.e., price limit for three consecutive days), if D3 Trading day is the last trading day of such contract, the contract shall directly lead to delivery; if D4 Trading day is the last trading day of such contract, the futures contract shall continue trading according to price limit and margin level of D3 Trading day on D4 Trading day. Except the above two cases, the futures contract shall suspend trading on D4 Trading day. On D4 Trading day, the Exchange shall take any one of the following two measures for such futures contract in view of market situations:
Measure A: On D4 Trading day, the Exchange shall decide and announce that on D5 Trading day, it will take one or more measures (such as raising trading margin in one-sided or dual-sided manner, at the same proportion or different proportions, and for some members or all members; suspending position opening for some members or all members; adjust magnitude of price limit; Withdrawal Restriction; Position closing; Mandatory Liquidation, etc) to resolve market risk, but adjusted price limit shall not change by more than 20%. After the Exchange announces the adjustment of margin level, members with insufficient margin shall fill the gap before the market opening of D5 Trading day. If price change of futures contract doesn’t go beyond intraday price limit on D5 Trading day, price limit and percentage of trading margin of such futures contract shall return to normal level on D6 Trading day. If price change of futures contract reaches intraday price limit in the same direction on D5 Trading day, the Exchange shall announce that such situation is abnormal, and shall take risk control measures according to relevant provisions. If both price change of futures contract on D5 Trading day and price change of future contract on D3 Trading day reach intraday price limit in the opposite direction, this shall be deemed as the beginning of a new round of one-sided market, and that day shall be deemed as D1 Trading day. Trading margin and price limit of the next trading day shall be subjected to the foregoing provisions (Article 12 of risk control management measures of Shanghai Futures Exchange).
Measure B: At the time of settlement on D4 Trading day, for open interest order declared at price limit price on D3 Trading day, the Exchange shall refer to price limit price on D3 Trading day, and make automatic brokered trading with profit-gaining Client (or FF member, the same below) with net position according to the proportion of positions. If the same client holds two-way position, it shall at first close open interest, and then close positions method by means of the methods as described above. For specific methods of operation, Article 14 of risk control management measures of Shanghai Futures Exchange shall prevail.
(3) Risk management when cumulative price limit variation for several consecutive trading days reaches a certain level
When rebar, wire rod or hot rolled coil futures contract sees cumulative price variation rate of 7.5% for three consecutive trading days (D1, D2 and D3); cumulative price variation rate of 9% for four consecutive trading days (D1, D2, D3 and D4); or cumulative price variation rate of 10.5% for five consecutive trading day (D1, D2, D3, D4 and D5), the Exchange can take into account market conditions, and take one or more measures (such as raising trading margin in one-sided or dual-sided manner, at the same proportion or different proportions, and for some members or all members; suspending position opening for some members or all members; adjust magnitude of price limit; withdrawal restriction; position closing; mandatory liquidation, etc) to resolve market risk, but adjusted price limit shall not change by more than 20%.
|
Consecutive days |
3 |
4 |
5 |
|
Price limit variation |
7.5% |
9% |
10.5% |
The N is calculated by the following formula:
N
t=3,4,5
P0 is the settlement price of the trading day prior to D1;
Pt is the settlement price of the trading day and t=3, 4, 5;
P3 is the settlement price of D3;
P4 is the settlement price of D4;
P5 is the settlement price of D5.
Note: Margin in case of price limit for consecutive days (with reference to relevant provisions concerning price limit system)
(4)Position limit system
1. Position limit refers to the maximum quantity of one-sided positions of a contract held by member or client.
Proportion and size of position limit for futures contracts of various products during different periods, held by FF member, Non-FF member and client, are specified as follows:
Proportion and size of position limit for rebar and wire rod futures contracts during different periods (Unit: lots)
|
|
From the date of contract listing to the last trading day of the second month prior to the delivery month |
The first month prior to the delivery month |
The delivery month |
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Position of a futures contract |
Position limit proportion (in %) |
Size of position limit (in lots) |
Size of position limit (in lots) |
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|
FF member |
Non-FF member |
Client |
FF member |
Non-FF member |
Client |
FF member |
Non-FF member |
Client |
||
|
Rebar |
≥1.2 million lots |
25 |
10 |
5 |
30000 |
9000 |
3000 |
6000 |
1800 |
600 |
|
Wire rod |
≥450,000 lots |
25 |
10 |
5 |
18000 |
6000 |
1800 |
3600 |
1200 |
360 |
Note: In this table, position of a futures contract is under dual-sided calculation, Position limit of FF member, Non-FF member and client is under one-sided calculation; FF member’s position limits is the base.
Proportion and size of position limit for hot rolled coil futures contracts during different periods (Unit: lots)
|
Hot rolled coil |
From the date of contract listing to the delivery month |
From the date of contract listing to the last trading day of the second month prior to the delivery month |
The first month prior to the delivery month |
The delivery month |
||||
|
Position of a futures contract |
Position limit proportion (in %) |
Size of position limit (in lots) |
Size of position limit (in lots) |
Size of position limit (in lots) |
||||
|
FF member |
Non-FF member |
Client |
Non- FF member |
Client |
Non- FF member |
Client |
||
|
≥3.6 million lots |
25 |
180000 |
180000 |
9000 |
9000 |
1800 |
1800 |
|
Note: In this table, position of a futures contract is under dual-sided calculation, Position limit of FF member, Non-FF member and client is under one-sided calculation; FF member’s position limits is the base.
2. The Exchange shall carry out classified management for positions of hedging trading and positions of speculative trading. Hedging positions shall not be restricted by restricted quantity of speculative positions.
3. A client’s positions held at one or more FF members shall be aggregated to determine whether such open positions exceed the client’s fixed-amount position limit.
4. Before closing on the last trading day of the month before delivery month, every member and client’s speculative position for futures contract of rebar, wire rod and hot rolled coil shall be adjusted to integer multiple of 30 lots (if adjustment cannot be made on schedule under special circumstances, it can be postponed by one day). In delivery month, speculative position for futures contract of rebar, wire rod and hot rolled coil shall be integer multiple of 30 lots, while the newly opened and closed positions shall be also integer multiple of 30 lots.
For adjustment of integer multiple of hedging positions near the settlement period, adjustment method of integer multiple of speculative positions shall prevail.
(5) Large trader reporting system
Any member or client, whose speculative positions in a contract reaches eighty percent (80%) or more of his speculative position limit, or as required by the Exchange, shall report to the Exchange about his financial conditions and his position holding. The client shall submit such report through his FF member. The Exchange will, in its sole discretion, set and adjust the position limit accordingly.
(6) The mandatory position liquidation
The Exchange shall impose mandatory position liquidation on the member or the client, if:
1. The balance of the clearing deposit of such member falls below zero (0) and he fails to meet the margin requirement within the specified time limit;
2. His open interest exceeds the size of the applicable position limit;
3. Such member or client fails to bring his positions in a contract to multiples as required within the specified time limit;
4. Such member or client violates any Exchange’s rules that warrants a mandatory position liquidation;
5. Any emergency happens that warrants a mandatory position liquidation; or
6. Any other conditions exist that makes the mandatory position liquidation necessary.
Under the conditions provided in the above item (2), if a client or a non-FF member, whose open interest in contracts exceeds the applicable position limit, the Exchange shall enforce liquidation of the positions in excess of the position limit held by such client or non-FF member; if a FF member whose open interest in contracts reaches or exceeds the applicable position limit, shall not be allowed to open any positions in the same direction.
7. Risk warning system
The Exchange shall implement risk warning system. When the Exchange deems necessary, it can separately or simultaneously take one or more measures (such as request for reporting, conversation for caution, written warning, public censure and announcement on risk warning) to alert and mitigate risks.
Highlights of Management Measures for Hedging Trading
Hedging refers to the futures trading activities designed to avert non-futures price risks. Namely, one sells or buys equivalent amount of futures in the futures market while buying or selling the physical commodities. After a period of time, the profit/loss on non-futures trading arising from price changes may be offset or covered up by the loss/profit on futures trading, thus establishing a hedging mechanism between the non-futures and the futures to minimize the price risks.
Hedging trading adopts the approval system. Hedging trading is classified as long hedging and short hedging.
According to the Measures of Shanghai Futures Exchange for Administrating Natural Rubber Hedging Trading, the hedging positions for natural rubber futures include regular month hedging positions and nearby delivery month hedging positions. The term “regular month” here means months during the period from the date of listing of the contract till the last trading day of the second month prior to the delivery month, and the term “nearby delivery month hedging position” means the hedging position in the first month prior to the delivery month and the delivery month.
(1) Documents that need to be submitted by clients for applying for regular month hedging positions
Each member or client applying for regular month hedging positions shall complete an Application (Approval) Form for Regular Natural Rubber Month Hedging Positions on the Exchange, and include the following documents:
1. A photocopy of his business license;
2. A profile of his business performance in non-futures for the last calendar year;
3. A business plan for the non-futures for the current calendar year or the next calendar year; purchase and sale contract or other valid vouchers corresponding to application for hedging positions;
4. A plan for hedging, including a description of the source of risks, objectives for the hedge and anticipated amounts needed for delivery or close-out of positions;
5. And any other documents as required by the Exchange.
(2) Documents that need to be submitted by the clients for applying for nearby delivery month hedging positions
Each member or client applying for nearby delivery month hedging positions shall complete an Application (Approval) Form for Natural Rubber Nearby Delivery Month Hedging Positions on the Exchange, and include the following documents:
|
Type of enterprises |
Producer |
Production plan for the current calendar year or the last calendar year; non-futures warrants that are in the same amounts as those hedging positions or other valid certificates evidencing ownership of physicals. |
|
Processer |
Production plan for the current calendar year or the last calendar year; if applying for hedging positions for long purpose, order forms for processing or sales and purchase contracts that are in the same amounts as those hedging positions; if applying for hedging positions for short purpose, non-futures warrants that are in the same amounts as those hedging positions or other valid certificates evidencing ownership of physicals, i.e., sales and purchase contracts or invoices. |
|
|
Trader or others |
If applying for hedging positions for long purpose, sales and purchase contract that are in the same amounts as those hedging positions or other valid certificates evidencing ownership of physicals; if applying for hedging positions for short purpose, non-futures warrants that are in the same amounts as those hedging positions, sales and purchase contract or invoice. |
The Exchange has the right to require any other documents apart from those listed from the member or the clients as it deems necessary.
3. Application period of hedging
Application for hedging positions in general month shall be made before the last trading day of the second month before delivery month of hedging contract. Application for hedging positions in near month shall be made from the first trading day of the third month before delivery month of hedging contract to the last trading day of the first month before delivery month. The Exchange shall not accept overdue application for hedging position of such delivery month. Hedgers can apply for hedging positions of many delivery month contracts one time. The Exchange shall review within five trading days upon receipt of application for hedging positions.
4. Establishment period of hedging positions
The member or client who is approved to hold hedging positions shall establish positions pursuant to whether the positions approved are long or short positions and the amounts of the positions before the closing of the market of the last trading day of the 1st month prior to the delivery month specified in the contract. It shall be deemed a waiver of the hedging positions if the positions are not established in the prescribed time limit above. Hedging position shall not be repeatedly used from the first trading day in the month prior to the delivery month.
Highlights of Detailed Rules for Delivery
(1)Delivery and settlement price
Delivery and settlement price of rebar, wire rod and hot rolled coil futures (hereinafter referred to as “steel futures”) shall be benchmark price of steel futures delivery and settlement, i.e., settlement price on the last trading day of the contract. At the time of delivery and settlement, buyer and seller shall add regional premium/discount on the basis of delivery and settlement price of the contract.
(2) Delivery unit
Delivery Unit of standard steel futures contract shall be 300 tons, and the delivery quantity must be a multiple of 300 tons.
Deliverable grade
1. Rebar
Standard:Φ16mm,Φ18mm,Φ20mm,Φ22mm and Φ25mm rebar marked with HRB400 or HRBF400 in line with the national standard GB1499.2-2007 Steel for the Reinforcement of Concrete-Part 2: Hot Rolled Ribbed Bars.
Substitute:Φ16mm,Φ18mm,Φ20mm,Φ22mm and Φ25mm rebar marked with HRB335 or HRBF335 in line with the national standard GB1499.2-2007 Steel for the Reinforcement of Concrete-Part 2: Hot Rolled Ribbed Bars.
2. Wire rod
Standard：Φ8mm wire rod marked with HPB235 in line with the national standard GB1499.1-2008 Steel for the Reinforcement of Concrete-Part 1: Hot Rolled Plain Bars.
Substitute: Φ6.5mm wire marked with HPB235 in line with the national standard GB1499.1-2008 Steel for the Reinforcement of Concrete-Part 1: Hot Rolled Plain Bars.
3. Hot rolled coil
Standard: the hot rolled coil shall conform to Q235B of the national standard GB/T3274-2007 Hot Rolled Plates and Strips of Carbon Structural Steels and High Strength Low-alloy Structural Steel or SS400 of JIS G 3101-2010 Rolled Steel for General Structure with the thickness of 5.75mm and width of 1,500mm.
Substitute: the hot rolled coil shall conform to Q235B of the national standard GB/T3274-2007 Hot Rolled Plates and Strips of Carbon Structural Steels and High Strength Low-alloy Structural Steel, or SS400 of JIS G 3101-2010 Rolled Steel for General Structure with the thickness of 9.75mm, 9.5mm, 7.75mm, 7.5mm, 5.80mm, 5.70mm, 5.60mm, 5.50mm, 5.25mm, 4.75mm, 4.50mm, 4.25mm, 3.75mm, 3.50mm and width of 1,500mm.
Substitute: Hot-rolled Coil of SS400 and Q235B grade with thickness of 5.75 mm, 9.75 mm, 9.5mm, 7.75mm, 7.5mm, 5.80mm, 5.70mm, 5.60mm, 5.50mm, 5.25mm, 4.75mm, 4.50mm, 4.25mm, 3.75mm and 3.50mm and width 1500mm under GB/T 3274-2007 Hot-rolled Thick Steel Plates and Steel Strips Made of Carbon Structural Steel and Low-Alloy Structural Steel or under JIS G 3101-2010 Rolled Steel for General Structure.
(4) Necessary documents for delivery of commodity
Product quality certificate issued by registered manufacturer.
(5) Delivery fee
For physical delivery, buyer and seller shall pay delivery commission of 1 Yuan/ton to the Exchange, respectively. Where Shanghai Futures Exchange adjusts delivery commission, announcement shall prevail.
(6) Settlement type
1. Physical delivery of expired steel futures contract shall refer to standard delivery procedures.
2. For unexpired steel futures contract, physical delivery can be made by way of Exchange for Physicals (hereinafter referred to as “EFP”). Where Buyer and Seller adopt EFP, they shall declare in advance and make successful pairing. The specific rules are described below.
(7) Standard warrant generation
Before owner makes shipment to designated delivery warehouse, shall make stock-in declaration (delivery forecast). Stock-in declaration contents shall include variety, level (grade), trademark, quantity, shipper and name of designated delivery warehouse, and provide various documents. Client shall entrust FF to handling stock-in declaration (delivery forecast) formalities.
1. Review and approval for stock-in declaration
Within warehouse capacity, according to owner’s wish, the Exchange shall decide whether to approve stock-in within three days. Owner shall make shipment to designated delivery warehouse identified in stock-in declaration within the validity period specified by the Exchange. Commodity, for which stock-in is not approved by the Exchange or fails to stock-in in the validity period, cannot be used for delivery.
Stock-in declaration shall be effective since from the date of approval. Stock-in declaration shall be valid for 15 days.
2. Inspection and acceptance upon arrival of goods
In accordance with the relevant provisions of future delivery, designated delivery warehouse shall inspect and accept variety, grade, quantity, quality and packaging of stock-in commodity and related documents. Owner shall go to designated delivery warehouse to supervise and accept. Otherwise, this shall be deemed as that owner consents to acceptance results of designate delivery warehouse.
After the acceptance is completed, designated delivery warehouse shall input Stock-in acceptance results into standard warrant management system. Then member shall submit preparation application for standard warrant to the Exchange.
3. Warrant generation
After the Exchange approves preparation of standard warrant, designated delivery warehouse shall check stock-in declaration data and prepare warrant. Owner of standard warrant shall accept and confirm newly issued warrant. Where owner of standard warrant fails to accept and confirm warrant issued by designated delivery warehouse upon receipt of notice on acceptance of standard warrant within three days, this shall be deemed that owner accepts and confirms, and standard warrant shall automatically take effect.
(8) Standard delivery procedures
After the last trading day of contract, holders of all open interest contracts shall fulfill by way of physical delivery. Client’s physical delivery shall be handled by Member in the name of member in the Exchange. Client, who fails to deliver or receive special VAT invoice, shall be disallowed to make delivery.
After closing of the third trading day before last trading day of a steel futures contract, natural person Client’s position of such steel futures contract shall be 0 lot. Since the second trading day before the last trading day, the Exchange shall directly launch Mandatory liquidation for natural person client’s position of such month.
Delivery of expired contract shall be completed within five consecutive working days after the last trading day of such contract. These five delivery days shall be referred to as Delivery Day 1, Delivery Day 2, Delivery Day 3, Delivery Day 4 and Delivery Day 5 (i.e., Last Delivery Day).
Delivery Day 1
1. Buyer shall declare intention. On Delivery Day 1, buyer shall submit letter of intent on required commodity to the Exchange, including variety, quantity, name of designated delivery warehouse, etc.
2. Seller shall submit standard warrant. On Delivery Day 1, Seller shall submit effective standard warrant (warehousing fee has been paid) via standard warrant management system to the Exchange. Warehousing fee shall be paid by seller until Delivery Day 5 (including such day), and warehousing fee incurred thereafter shall be paid by buyer (fee items and fee scale of designated delivery warehouse shall be verified and separately announced by the Exchange).
Delivery Day 2
The Exchange shall distribute standard warrant. In view of existing resources, the Exchange shall make pairing under the principles of time priority; quantity being rounded to the nearest integer; nearest matching; coordinated allocation”.
Delivery Day 3
1. Buyer shall pay and obtain standard warrant Buyer shall pay before 14:00 on Delivery Day 3 in the Exchange, and obtain standard warrant.
2. Seller shall receive payment. The Exchange shall transfer payment to seller before 16:00 on Delivery Day 3. Under special circumstances, the Exchange can extend the delivery payment deadline.
Delivery Day 4-5
Seller shall hand over special VAT invoice, and then the Exchange shall refund respective trading margin. For margin refunding and invoice matters, the relevant provisions of Detailed Rules of Shanghai Futures Exchange for Settlement.
(9) Warrant transfer procedures
Standard warrant in exchanges physical delivery, the transfer process is as follows:
1. Seller Client shall authorize Standard Warrant to Seller FF Member to handle physical delivery business;
2. Seller member shall submit standard warrant to the Exchange;
3. The Exchange shall distribute standard warrant to buyer member;
4. Buyer FF member shall distribute standard warrant to buyer client.
(10) Pickup
When legitimate holder of standard warrant takes pickup, it shall submit standard warrant stock-out application to designated delivery warehouse. After designated delivery warehouse reviews standard warrant, shipment shall be made.
Pickup mode shall be indicated by owner of standard warrant in stock-out application:
1. Independent pickup: designated delivery warehouse shall make shipment after standard warrant is verified correctly. Owner shall supervise for shipment. Otherwise, this shall be deemed as designated delivery warehouse makes shipments correctly.
2. Third party pickup: owner shall submit a letter of authorization, and indicate entrusted pickup entity, pickup password, contact person, telephone and other contact information on stock-out application. Designated delivery warehouse shall make shipment after standard warrant is verified correctly. Pickup entity entrusted by owner should supervise for shipment. Otherwise, this shall be deemed as owner consents to that designated delivery warehouse makes shipments correctly.
3. Designated delivery warehouse commissioned for shipment shipped: Owner shall submit a letter of authorization, and indicate shipment address, contact person, telephone and other contact information on stock-out application. Designated delivery warehouse shall make shipment after standard warrant is verified correctly. Owner shall consent to that designated delivery warehouse makes shipments correctly.
When designated delivery warehouse makes shipments, it shall promptly fill in Standard Warrant Stock-out Confirmation Sheet (two copies, and owner and designated delivery warehouse hold each), and stamp special seal of delivery vs. payment on the received corresponding standard warrant, keep and file copies together with warehouse for safekeeping and future reference.
Buyer and seller shall be responsible for physical delivery and transportation in designated delivery place. When owner takes pickup, it shall pay off the related fees to plants and warehouses.
(11) Handling of quality dispute
If buyer opposes to quality of delivery of goods and quantity (delivery goods shall be placed in designated delivery warehouse), it shall submit a written application to the Exchange (including submission day, extended to the first working day after legal holidays) before the 15th day of the month following physical delivery month. Buyer shall also provide quality verification conclusion issued by quality supervision and inspection agency designated by the Exchange (list of quality supervision and inspection agencies will be announced by the Exchange). Validity period of each batch of steel goods for delivery shall cover the last delivery day of the current delivery. Even if delivery deadline for each batch of steel goods for delivery is earlier than deadline for the submission of quality objections, if quality verification conclusion for this batch of steel goods is that they are substandard goods, Seller shall still bear full responsibility for the actual quality of such batch of goods.
(12) EFP
1. Definition
EFP refers to that after members (clients) who hold contract of the same delivery month in the opposite direction reach agreement, apply to the Exchange and obtain the approval of the Exchange, they respectively have their contracts liquidated by the Exchange at the prices specified by the Exchange, and carry out warrant, lading and other exchange behaviors with the same quantity, the same or similar variety and the same direction as subject matters of futures contracts according to the agreement prices.
Unexpired steel futures contracts can achieve physical delivery by way of EFP.
EFP shall be applicable to historical positions of steel futures rather than apply for new positions on application date.
2. Deadline for application period
EFP deadline shall run from date of intended EFP contract listing to the second trading day before the last trading day of delivery month (including the day).
3. EFP implementation mode
After members (clients) who hold contract of the same delivery month reach agreement, they submit EFP application to the Exchange via Standard Warrant Management System before 14:00 on a trading day (application date) of EFP deadline.
For delivery with non-standard warrant, buyer and seller members (clients) shall abide by relevant state laws and regulations, and provide copies of relevant buy-sell agreements and bills of lading.
The original corresponding futures positions, held by buyer and seller to apply for EFP, shall be liquidated by the Exchange before 15:00 on application date according to settlement price of contract on the last day before application date of delivery month. EFP delivery settlement price shall be price agreed by buyer and seller members (clients).
When standard warrant is used in EFP process, clearing (including purchase price and warrant) shall be done in the Exchange. Trading margin for EFP shall be calculated according to according to settlement price of contract on the last day before application date, and clearing shall be completed before 14:00 on trading day after application date in the Exchange. Seller shall submit special VAT invoice to the Exchange within seven days upon EFP formalities.
When non-standard warrant is used in EFP process, payment and document flow can be done in the Exchange as agreed by buyer and seller members (clients), which can also be directly done by buyer and seller. Dispute in delivery process shall be resolved by buyer and seller, for which the Exchange shall not be liable for performance guarantee.
I. Delivery of Rebar
Article 1 Delivery Unit: 300 tons.
Article 2 Delivery grade: Please refer to Rebar Standard Futures Contract of Shanghai Futures Exchange.
Article 3 Quality provisions for delivered rebar
Delivered rebar shall be registered commodity produced by production plant registered in the Exchange.
Shape, dimension, weight and tolerance of delivered Rebar shall be in line with the national standard GB1499.2-2007 Steel for the reinforcement of concrete-Part 2: Hot rolled ribbed bars.
Expiration date of each batch of delivered rebar shall be 90 days from production date, each warrant of rebar. Rebar of every warrant shall take the earliest production date as production date, and warrant shall be prepared after stock-in designated delivery warehouse within 30 days from production date. This Article shall be followed according to Article 10 of Detailed Rules of Shanghai Futures Exchange for Delivery. Before owner makes shipment to designated delivery warehouse, it shall entrust FF member to handle stock-in declaration (delivery forecast) procedures. Therefore, in the process of generating standard warrant, owner must entrust member to submit stock-in declaration via standard warrant management system within 30 days since commodity production date, and make goods arrive in futures stack of delivery warehouse designated by the Exchange. After warehouse audits and inspects goods and documents and inputs results into warrant system, member shall promptly submit warrant preparation application via warrant system to the Exchange.
Rebar delivered in the designated delivery warehouse shall be 9 meters and 12 meters (cut-length).
Article 4 Packaging and stacking of delivered rebar
Packaging, marking and quality certificate of delivered rebar shall be in line with the national standard GB1499.2-2007 Steel for the reinforcement of concrete-Part 2: Hot rolled ribbed bars.
Rebar specified by every warrant shall consist of commodity with the same production enterprise, the same grade, the same registered trademark, the same nominal diameter and the same length. Production dates of rebar specified by all warrants shall cover at most ten consecutive days.
Subject of physical delivery of rebar specified by every warrant shall be treated as a stacking position.
Article 5 Necessary documents of delivered commodity
Product quality certificate, issued by registered production enterprise, should be provided.
Article 6 Measurement and over and short
Delivered rebar shall be measured under actual weighing mode. Over and short of every rebar standard warrant shall not exceed ±3%, and pound difference shall not exceed ±0.3%.
Article 7
During the delivery period, if standard warrant, special VAT invoice, payment and other matters are completed before 14:00 on delivery date, the Exchange shall refund corresponding delivery margin on that trading day. If these matters are completed after 14:00 on the same day, the Exchange shall refund corresponding delivery margin on the next trading day.
Article 8 Delivery venue
Designated delivery warehouse (designated and announced by the Exchange).
II. Delivery of Wire Rod
Article 1 Delivery Unit: 300 tons.
Article 2 Delivery grade: Please refer to Wire Rod Standard Futures Contract of
Article 3 Quality provisions for delivered wire rod
Delivered wire rod shall be registered commodity produced by production plant registered in the Exchange.
Shape, dimension, weight and tolerance of delivered wire rod shall be in line with the national standard GB1499.1-2008 Steel for the reinforcement of concrete-Part 1: Hot rolled plain bars.
Expiration date of each batch of delivered wire rod shall be 90 days from production date, each warrant of wire rod. Wire rod of every warrant shall take the earliest production date as production date, and Warrant shall be prepared after stock-in designated delivery warehouse within 30 days from production date. This Article shall be followed according to Article 10 of Detailed Rules of Shanghai Futures Exchange for Delivery. Before owner makes shipment to designated delivery warehouse, it shall entrust FF member to handle stock-in declaration (delivery forecast) procedures. Therefore, in the process of generating standard warrant, owner must entrust member to submit stock-in declaration via standard warrant management System within 30 days since commodity production date, and make goods arrive in futures stack of delivery warehouse designated by the Exchange. After warehouse audits and inspects goods and documents and inputs results into Warrant system, Member shall promptly submit warrant preparation application via Warrant System to the Exchange.
Article 4 Packaging and stacking of delivered wire rod
Packaging, marking and quality certificate of delivered wire rod shall be in line with the national standard GB1499.1-2008 Steel for the reinforcement of concrete-Part 1: Hot rolled plain bars.
Wire rod specified by every warrant shall consist of commodity with the same production enterprise, the same grade, the same registered trademark and the same nominal diameter. Production dates of wire rod specified by all warrants shall cover at most two consecutive days.
Subject of physical delivery of wire rod specified by every warrant shall be treated as a stacking position.
Article 5 Necessary documents of delivered commodity
Product quality certificate, issued by registered production enterprise, should be provided.
Article 6 Measurement and over and short
Delivered wire rod shall be measured under actual weighing mode. Over and short of every Wire Rod Standard Warrant shall not exceed ±3%, and pound difference shall not exceed ±0.3%.
Article 7
During the delivery period, if standard warrant, special VAT invoice, payment and other matters are completed before 14:00 on delivery date, the Exchange shall refund corresponding delivery margin on that trading day. If these matters are completed after 14:00 on the same day, the Exchange shall refund corresponding delivery margin on the next trading day.
Article 8 Delivery venue
Designated delivery warehouse (designated and announced by the Exchange).
III. Delivery of Hot Rolled Coil
Article 1 Delivery Unit: 300 tons.
Article 2 Delivery grade: Please refer to Hot Rolled Coil Standard Futures Contract of
Article 3 Quality provisions for delivered hot rolled coil
Shape, dimension, weight and tolerance of delivered hot rolled coil shall be in line with GB/T3274-2007 Hot rolled plates and strips of carbon structural steels and high strength low alloy structural steel, or JIS G3101-2010 Rolled steel for general structure
Expiration date of each batch of delivered hot rolled coil shall be 360 days from production date, each warrant of hot rolled coil. Hot rolled coil of every warrant shall take the earliest production date as production date, and warrant shall be prepared after stock-in designated delivery warehouse within 45 days from production date. This Article shall be followed according to Article 10 of Detailed Rules of Shanghai Futures Exchange for Delivery. Before owner makes shipment to designated delivery warehouse, it shall entrust FF member to handle stock-in declaration (delivery forecast) procedures. Therefore, in the process of generating standard warrant, owner must entrust member to submit stock-in declaration via standard warrant management system within 45 days since commodity production date, and make goods arrive in futures stack of delivery warehouse designated by the Exchange. After warehouse audits and inspects goods and documents and inputs results into warrant system, Member shall promptly submit warrant preparation application via warrant system to the Exchange.
Article 4 Packaging and stacking of delivered hot rolled coil
Packaging, marking and quality certificate of delivered hot rolled coil shall be in line with GB/T3274-2007 Hot rolled plates and strips of carbon structural steels and high strength low alloy structural steel, or JIS G3101-2010 Rolled steel for general structure
Hot rolled coil specified by every warrant shall consist of commodity with the same production enterprise, the same grade, the same registered trademark and the same nominal diameter. Production dates of hot rolled coil specified by all Warrants shall cover at most ten consecutive days.
Subject of physical delivery of hot rolled coil specified by every warrant shall be treated as a stacking position.
Article 5 Necessary documents of delivered commodity
Product quality certificate, issued by registered production enterprise, should be provided.
Article 6 Measurement and over and short
Delivered hot rolled coil shall be measured under actual weighing mode. Over and short of every hot rolled coil standard warrant shall not exceed ±3%, and pound difference shall not exceed ±0.3%.
Article 7
During the delivery period, if standard warrant, special VAT invoice, payment and other matters are completed before 14:00 on delivery date, the Exchange shall refund corresponding delivery margin on that trading day. If these matters are completed after 14:00 on the same day, the Exchange shall refund corresponding delivery margin on the next trading day.
Article 8 Delivery venue
Designated delivery warehouse (designated and announced by the Exchange).
Supplementary Regulations for Delivery of Steel Futures
(1) Additional regulations of Shanghai Futures Exchange for rebar delivery
According to non-futures market trading characteristics and user needs, it is decided that supplementary provisions shall be made for the delivery of rebar delivery:
When client makes sell delivery of rebar futures contract, distribution of nominal diameter of delivered commodity shall meet the following requirements:
1. Delivery quantity ≤ 6000 tons: the same nominal diameter shall prevail.
2. 6,000 tons < delivery quantity ≤ 9,000 tons: At least two nominal diameters shall prevail. And each nominal diameter shall not be 60% higher than total delivery quantity.
3. 9,000 tons < delivery quantity ≤ 18,000 tons: At least three nominal diameters shall prevail. And each nominal diameter shall not be 40% higher than total delivery quantity.
4. Delivery quantity > 18,000 tons: At least four nominal diameters shall prevail. And each nominal diameter shall not be 30% higher than total delivery quantity.
But the commodity, bought by the same client from the Exchange to sell for delivery, shall be exception.
(2)Additional regulations of Shanghai Futures Exchange for hot rolled coil delivery
According to non-futures market trading characteristics and user needs, it is decided that supplementary provisions shall be made for the delivery of Hot-rolled Coil delivery:
When client makes sell delivery of hot rolled coil futures contract, distribution of nominal diameter of delivered commodity shall meet the following requirements:
1. Hot rolled coil of every warrant shall be produced by registered enterprise approved by the Exchange, attached with the corresponding quality certificate.
2. Warrant shall be prepared after stock-in designated delivery warehouse within 45 days from production date. Production dates of hot rolled coil specified by all warrants shall cover at most ten consecutive days.
3. Warrant shall be issued after designated delivery accepts according to the provisions of the Exchange.
4. Deliverable roll weight range shall be 14-31 tons/roll.
5. When client makes sell delivery of hot rolled coil futures contract, distribution of thickness of delivered commodity shall meet the following requirements:
Delivery number ≤ 900 tons: the same thickness shall prevail.
900 tons < delivery quantity ≤ 1,800 tons: At least two thicknesses shall prevail. And each thickness shall not be 60% higher than total delivery quantity.
1,800 tons < delivery quantity ≤ 3,600 tons: At least three thicknesses shall prevail. And each thickness shall not be 45% higher than total delivery quantity.
3,600 tons < delivery quantity ≤ 7,200 tons: At least four thicknesses shall prevail. And each thickness shall not be 35% higher than total delivery quantity.
7,200 tons < delivery quantity ≤ 12,000 tons: At least five thicknesses shall prevail. And each thickness shall not be 25% higher than total delivery quantity.
12,000 tons < delivery quantity ≤ 18,000 tons: At least seven thicknesses shall prevail. And each thickness shall not be 20% higher than total delivery quantity.
Delivery quantity > 18,000 tons: At least eight thicknesses shall prevail. And each thickness shall not be 15% higher than total delivery quantity.
But the commodity, bought by the same client from the Exchange to sell for delivery, shall be exception.
(1) Registered enterprises and registered trademarks of rebar, wire rod and hot rolled coil in Shanghai Futures Exchange
(2) Designated quality supervision and inspection agencies of steel in Shanghai Futures Exchange
(3) Premium/discount of rebar, wire rod and hot rolled coil and charging rates of designated delivery warehouses in Shanghai Futures Exchange
(4) Designated delivery warehouses of rebar, wire rod and hot rolled coil in Shanghai Futures Exchange
Registered Enterprises and Registered Trademarks of Rebar and Wire Rod in
(Up to March 21st, 2014)
|
Rebar |
Wire rod |
||||
|
No. |
Registered enterprises |
Trademarks |
No. |
Registered enterprises |
Trademarks |
|
1 |
Shougang Group (warrant registration suspended) |
Shougang |
1 |
Shougang Group (warrant registration suspended) |
Shougang |
|
2 |
Jiangsu Shagang Group |
Sha-Steel |
2 |
Jiangsu Shagang Group |
Sha-Steel |
|
3 |
Ma’anshan Iron and Steel Co., Ltd |
Masteel |
3 |
Ma’anshan Iron and Steel Co., Ltd |
Masteel |
|
4 |
Xinxing Ductile Iron Pipes Co., Ltd. |
Xinxing |
4 |
Hunan Valin Steel Co., Ltd |
Valin Steel |
|
5 |
Hunan Valin Steel Co., Ltd |
Valin Steel |
5 |
Rizhao Steel Rolling Co., Ltd |
Huaqi |
|
6 |
Rizhao Steel Rolling Co., Ltd |
Huaqi |
6 |
Haixin Iron and Steel Co., Ltd |
Haixin |
|
7 |
Haixin Iron and Steel Co., Ltd |
Haixin |
7 |
|
Guotai |
|
8 |
Pingxiang Iron and Steel Co., Ltd (warrant registration suspended) |
Bosheng |
8 |
Pingxiang Iron and Steel Co., Ltd (warrant registration suspended) |
Bosheng |
|
9 |
Jiangsu Yonggang Group Co., Ltd. |
Lianfeng |
9 |
Jiangsu Yonggang Group Co., Ltd. |
Lianfeng |
|
10 |
|
Guotai |
10 |
|
Yanshan |
|
11 |
|
Laigang Jigang |
11 |
Beitai Iron and Steel Group Co., Ltd. |
Beitai |
|
12 |
|
Yanshan |
12 |
Fujian Sangang Minguang Co., Ltd |
Minguang |
|
13 |
|
|
13 |
Shaoguan Steel Songshan Co., Ltd |
Shaogang |
|
14 |
Fujian Sangang Minguang Co., Ltd |
Minguang |
14 |
Zhongtian Steel (Group) Corporation |
ZENITH |
|
15 |
Shaoguan Steel Songshan Co., Ltd |
Shaogang |
15 |
Jiuquan Iron and Steel Group |
JISCO |
|
16 |
Guangzhou Iron and Steel Co., Ltd (warrant registration suspended) |
Wuyang |
16 |
|
WISCO |
|
17 |
Zhongtian Steel (Group) Corporation |
ZENITH |
|
|
|
|
18 |
Jiuquan Iron and Steel Group |
JISCO |
|
|
|
|
19 |
Tranvic |
|
|
|
|
|
20 |
|
Beitai |
|
|
|
|
21 |
|
Yulong |
|
|
|
|
22 |
Lingyuan Iron and Steel Group Co, Ltd |
LingYuan |
|
|
|
|
23 |
|
WISCO KISC |
|
|
|
|
24 |
Heilongjiang Jianlong Steel Co., Ltd |
Jianlong |
|
|
|
|
25 |
Shanghai Shente Profile Steel Co., Ltd |
Shente |
|
|
|
|
26 |
Guangzhou Yufeng Enterprise Group Co., Ltd |
Yufeng |
|
|
|
|
27 |
Tonghua Iron and Steel Group Co., Ltd |
Changbaishan |
|
|
|
|
28 |
Siping Modern Steel Co., Ltd |
Hongzui |
|
|
|
|
29 |
Jiangyin Changda Steel Co., Ltd |
Changqiang |
|
|
|
|
30 |
Jingye Steel Company of |
Jingye |
|
|
|
|
31 |
Shandong Shiheng Special Steel Group Co.,Ltd |
Shite |
|
|
|
|
32 |
Jincheng Fusheng Steel Co., Ltd |
Xingjingang |
|
|
|
|
33 |
Jiangyin Xicheng Steel Co., Ltd |
XG (graphic) |
|
|
|
|
34 |
|
Shuangchui |
|
|
|
|
35 |
Xilin Iron and Steel Group Co., Ltd |
Tian’e |
|
|
|
Registered Enterprises and Registration Trademarks of Hot Rolled Coil in
(Up to March 21st, 2014)
|
No. |
Registered enterprises |
Trademarks |
|
1 |
Baosteel Group Corporation |
Baosteel |
|
2 |
|
WISCO KISC LZISC |
|
3 |
|
Ansteel |
|
4 |
|
HBIS |
|
5 |
|
BXSteel |
|
6 |
Jiangsu Shagang Group |
Sha-Steel |
|
7 |
Jiuquan Iron and Steel Group |
JISCO |
|
8 |
Rizhao Steel Holding Group |
Huaqi |
|
9 |
Shanxi Taiyuan Stainless Steel Co., Ltd |
TISCO |
|
10 |
Tonghua Iron and Steel Group Co., Ltd |
Changbaishan |
Designated Quality Supervision and Inspection Agencies of Rebar and Wire Rod in
Designated Quality Supervision and Inspection Agencies of Hot Rolled Coil in
|
No. |
Agencies’ names |
Contact persons |
Tel |
|
1 |
|
Chen Hong Gu Chen |
010-84603658/84603548 13801063685/13810060886 Fax: 010-84603183 |
|
2 |
|
Chen Jie |
010-82227916 18811060426 Fax: 010-82227916 |
|
3 |
CMST Shanghai Material Inspection Co., Ltd |
Zhu Baozhu Ding Minghua |
021-36583602/36583613 13311671069/13641938133 Fax: 021-36583614 |
Premium/Discount of Rebar, Wire Rod and Hot Rolled Coil and Charging Rates of Designated Delivery Warehouses in
I. Premium/Discount
(1) Regional premium/discount
Regional premium/discount is not applicable for other regions.
(2) Grade premium/discount
HRB335 or HRBF335 rebar substitute delivery premium is 130 Yuan/ton.
II. Warehousing Fee
|
Fee item |
Fee scale |
|
|
Warehousing rent |
Freight yard |
0.15 Yuan/ton*day |
|
Stock-in fee |
1. Dedicated route |
18 Yuan/ton |
|
2. Wharf |
15 Yuan/ton |
|
|
3. Self-shipment |
15 Yuan/ton |
|
|
Stock-out fee |
1. Dedicated route |
18 Yuan/ton |
|
2. Wharf |
15 Yuan/ton |
|
|
3. Self-pickup |
15 Yuan/ton |
|
Shanghai Futures Exchange will adjust premium/discount scale and warehousing fee in accordance with market developments, and issue separate notices.
Designated Delivery Warehouses of Rebar and Wire Rod in
(Up to March 21st, 2014)
|
No. |
Designated delivery warehouses names |
Address |
Railway destination (wharf) |
Contact persons |
Tel |
|
1 |
Shanghai Baosteel Logistics Co., Ltd |
No. 2035, |
Wharf: |
Pan Shuo Qiao Bin Yu Juan
|
021-33790928 33790325 F: 021-33790928
|
|
2 |
Wujing Agricultural Production Supplies Co., Ltd |
No. 275, |
Railway: Dedicated Route of agricultural supplies in Minhang Station Wharf: |
Gao Jun |
15900464088 021-64501589 F:021-64505786
|
|
3 |
|
No.98, |
Railway: Dedicated Route of Kangqiao Freight Yard in |
Li Ming |
0571-88027012 F: 0571-88027132
|
|
No.22-1, Changludou, |
Wharf: Chongxian Port Area of Hangzhou Port (inland water transportation) |
Jin Zhe |
0571-88013253 F:0571-88293234
|
||
|
No.353, |
Wharf: |
Ruan Xuedong |
0574-27690096 F:0574-27690096
|
||
|
4 |
Zhenjiang Huilong Yangtze Port Affairs Co., Ltd |
No.88,
|
Wharf:
|
Qian Wanyong Wen Xiangxu
|
0511-85898888 85938558 85938557 F:0511-85588959
|
|
5 |
Shanghai Qisheng Storage Management Co., Ltd |
No.1, |
Wharf: Zhenjiang Yingli Port Affairs Co., Ltd |
Gong Rongde Wu Xiaobo |
0523-84835065 F:0523-84835092 |
|
6 |
CMST Development Co., Ltd
|
No.32-1, |
Railway: Zhoujingxiang Dedicated Route: Dedicated Route of Wharf: |
Huang Haisu |
0510-85368888 F:0510-85360317
|
|
|
Railway: Dedicated Route of (Beijing Railway Bureau) Nancang－CMST Nancang Subsidiary |
Meng Xiaodong Gu Xiang
|
022-58986699 022-58986805 F:022-58986805
|
||
|
7 |
Jiangsu Jinju Logistics Investment Co., Ltd (for rebar) |
No.1, North Third Ring Road, Gulou District, |
Railway Station: Dedicated Route of Jiangsu Jinju Logistics Investment Co., Ltd |
|
0516-87533988 0516-87533819 F:0516-87533988 |
|
8 |
Guangdong Yuzhu Logistics Base Co., Ltd (for rebar) |
No.4, West Street, Tangge Village, Longhu Township, Shijing Town, Baiyun District, Guangzhou |
Railway: Destination (Railway Bureau) Dalang ( Dedicated Route: Baiyun Subsidiary of Guangdong Yuzhu Logistics Base Co., Ltd |
Huang Lebiao |
020-62110238
|
|
9 |
Tianjin TEDA Public Bonded Warehouse Co., Ltd |
No.39, |
Railway: Haitai Dedicated Route, Tanggu Station |
Du Yu |
022-59858176 F:022-59858179
|
Designated Delivery Warehouses of Hot Rolled Coil in
(Up to March 21st, 2014)
|
No. |
Designated delivery warehouses names |
Address |
Railway destination (wharf) |
Contact persons |
Tel |
|
1 |
Sinotrans Eastern Co., Ltd |
No.4088, |
Railway: five dedicated routes of foreign trade, Hejiawan Station, Shanghai Railway Bureau |
Wang Yao Chen Yuefeng |
021-63221003 F:021-56441555 |
|
No.748, |
Wharf: |
||||
|
2 |
Zhenjiang Huilong Yangtze Port Affairs Co., Ltd |
No.88, |
Wharf: |
Qian Wanyong Wen Xiangxu |
0511-85898888 85938558 85938557 F:0511-85588959
|
|
3 |
Wuxi Guolian Logistics Co., Ltd
|
No.168, |
Wharf: |
Zheng Jimin Yu Lin |
13771149693 13861857611 0510--83268687 F:0510-83268687
|
|
4 |
Metal Warehousing ( |
In North of Xushuguan Town, High-tech Zone, |
Railway: Dedicated Route of Wharf: |
Ni Hai Pan Wenjun |
13061707938 15821008607 0512-88877213 F: 0512-66725260
|
|
5 |
Jiangsu Jinju Logistics Investment Co., Ltd |
No.1, North Third Ring Road, Gulou District, |
Railway Station: Dedicated Route of Jiangsu Jinju Logistics Investment Co., Ltd |
|
0516-87533988 0516-87533819 F:0516-87533988
|
|
6 |
Shanghai Qisheng Storage Management Co., Ltd |
No.1, |
Wharf: Zhenjiang Yingli Port Affairs Co., Ltd Gong Rongde |
Gong Rongde Wu Xiaobo |
0523-84835065 F:0523-84835092
|
|
7 |
Guangdong Yuzhu Logistics Base Co., Ltd |
No.4, West Street, Tangge Village, Longhu Township, Shijing Town, Baiyun District, Guangzhou |
Railway: Destination (Railway Bureau) Dalang ( Dedicated Route: Baiyun Subsidiary of Guangdong Yuzhu Logistics Base Co., Ltd |
Huang Lebiao |
020-62110238 |
|
8 |
|
No.22-1, Changludou, |
Wharf: Chongxian Port Area of Hangzhou Port (inland water transportation) |
Jin Zhe |
0571-88013253 F:0571-88293234
|
|
9 |
|
No.299, |
Railway: Zhuangqiao Station, |
Ruan Xuedong |
0574-27685010 F:0574-86298111
|
|
10 |
CMST Development Co., Ltd |
No.32-1, |
Railway: Zhoujingxiang Dedicated Route: Dedicated Route of Wharf: |
Huang Haisu
|
0510-85368888 F:0510-85360317
|
|
|
Wharf: |
Ge Changxing |
025-81032367 F:025-81032355
|
||
|
|
Railway: Dedicated Route of (Beijing Railway Bureau) Nancang－CMST Nancang Subsidiary |
Meng Xiaodong Gu Xiang |
022-58986699 022-58986805 F:022-58986805
|
||
|
11 |
Tianjin TEDA Public Bonded Warehouse Co., Ltd |
No.39, |
Railway: Haitai Dedicated Route, Tanggu Station |
Du Yu |
022-59858176 F:022-59858179 |
Shanghai Futures Exchange
The contents of this manual are for reference only. For the latest information, please consult the relevant departments of Shanghai Futures Exchange (Tel: +86-21-68400000) or visit the website of the Shanghai Futures Exchange (http://tsite.shfe.com.cn).
Address: No.500,
Post Code: 200122
Tel: 8621-68400000
Fax: 8621-68401198
Website: http://tsite.shfe.com.cn
Shanghai Futures Exchange
[1] The interval requirements of production date rebar of each warrant revised and made a public announcement on June 4th, 2013. The original “two days” is changed into “10 days”. The new regulation of “10 days” has been implemented since May 16th, 2014.
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