(Yicai) Nov. 26 -- The first comprehensive global futures exchange ranking placed the Shanghai Futures Exchange second in the Asia-Pacific commodity business sector, following Hong Kong Exchanges and Clearing.

The new list, compiled by a research team led by Zhang Jun, dean of the School of Economics at Fudan University and director of the China Center for Economic Studies, is the first multi-dimensional quantitative evaluation of futures exchanges. It fills a gap in the field by assessing performance across capacity, governance, and macro indicators.

Chicago-headquartered CME Group, Atlanta-based Intercontinental Exchange, and Hong Kong Exchanges and Clearing ranked as the top three globally. The researchers said domestic exchanges are narrowing the distance with top-tier global peers as China’s commodity trade expands.

A person with BNP Paribas China’s Global Markets Department said SHFE, backed by the world’s largest industrial system, “has secured the top global spot in both trading volume and open interest for products closely tied to China’s real economy, such as rebar and fuel oil, forming a strong market foundation.”

The BNP Paribas insider also contrasted SHFE’s risk management with the London Metal Exchange’s handling of the “nickel crisis,” saying SHFE “demonstrated greater composure in managing extreme market movements, effectively maintaining market order.”

In March 2022, the LME suffered one of its worst market disruptions when nickel prices surged more than 250 percent in two days, driven largely by a massive short position held by Tsingshan Holding Group.

A representative from American commodities merchant Freepoint Commodities said China’s crude oil futures “provide global commodity traders like Freepoint with the opportunity for overseas entities to directly participate in the Chinese market.”

Shi Chenghu, chief executive of Bands Financial, a Hong Kong-based commodity and financial futures brokerage, cited the example of a German company using containerized freight index futures to lock in logistics costs, adding that SHFE “not only serves numerous Chinese industries expanding overseas but also caters to enterprises in China’s trading partner countries.”

Looking ahead, Freepoint said it hopes SHFE will introduce new products such as liquefied natural gas contracts, naphtha contracts, and green energy contracts.

The BNP Paribas source said SHFE should continue addressing gaps in product breadth, including agricultural products and foreign exchange derivatives, and further enhance cross-border services to unlock its potential.

Editor: Emmi Laine