(Yicai Global) Sept. 3 -- China's will diversify its commodity futures market and add more options on futures contracts, according to the vice-chair of the nation's main securities regulator.
The market should speed up the launch of more commodity futures to match industrial firms' demand for staple commodities, Li Chao from the China Securities Regulatory Commission told Yicai Global at a futures trading forum yesterday.
China has widened the scope of its futures contracts market to allow foreigners to trade crude oil, iron ore, purified terephthalic acid, and rubber, so that the nation could have more say in terms of international pricing. Futures involve an obligation to buy or sell the contract within a certain period while options grant the right but no obligation to do so.
The Zhengzhou Commodity Exchange will promote the debut of sodium carbonate futures and PTA options as soon as possible, said Chairman Chen Huaping. It will accelerate studies into futures contracts of coffee and peanuts, as well as vegetable oil and methanol options, he added. It will also consider new materials futures.
The Shanghai Futures Exchange will speed up the launch of crude oil options, and facilitate studies into natural gas, liquefied petroleum gas, refined oil futures, according to Lu Feng, executive vice president of the ShFE.
The domestic futures market is constantly becoming more international, said Lu. Foreign investors already account for 20 percent of crude oil futures trading, he added.
Since iron ore futures opened to foreigners in May 2018, over 150 traders, who mainly come from 13 countries, have participated, said Chen Anping, director of an international cooperation bureau under the Dalian Commodity Exchange.
Editor: Emmi Laine