Wednesday, March 2, 2011

Commodity Futures trading jumps by 38% in China

by Commodity Online

It looks 2011 is going to be a bright year for commodity futures trading in China. Trading in the four commodity futures exchanges in China has shot up a record 38.44% in January and February, according to the China Futures Association.

According to a report in People's Daily Online, the value of China's futures transactions in the first two months of this year rose 38.44 percent year on year to 19.16 trillion yuan (about 2.92 trillion U.S. dollars).

The report quoting figures from the China Futures Association said that the volume of the futures transactions in February dropped 13.93 percent to 62 million lots, but the transaction value was up 62.14 percent to 8.54 trillion yuan, down 12.78 percent and 19.53 percent from January, respectively.

China has four futures exchanges, with agricultural commodities mainly traded on the Dalian and Zhengzhou commodity exchanges, while metals are mainly traded on the Shanghai Futures Exchange, and stock index futures contracts are traded on the China Financial Futures Exchange.

The Shanghai Futures Exchange saw its transaction volume in February drop 46.69 percent to 15.84 million lots and its transaction value down 26.5 percent to 2.25 trillion yuan.

Transaction volume on the Zhengzhou Commodity Exchange in February was down 1.48 percent to 25.48 million lots but the value of transactions surged 71.76 percent to 2.42 trillion yuan.

Transaction volume on the Dalian Commodity Exchange in February rose 7.45 percent to 17.73 million lots with the transaction value up 27.08 percent to 1.01 trillion yuan.

On the China Financial Futures Exchange, transaction volume and value were to 2.99 million lots and 2.86 trillion yuan, down 31.14 percent and 28.36 percent from January, respectively.

Open interest by the end of February on the Shanghai Futures Exchange, Zhengzhou Commodity Exchange, Dalian Commodity Exchange was up 9.57 percent, 17.27 percent and 11.25 percent in February when compared with January, but the China Financial Futures Exchange suffered a drop of 1.51 percent in this regard.

Chen Hong, operation director of the Beijing division of Nanhua futures, attributed the decline in the quantity of transactions to a range of moves by the futures market authorities to deter speculation since late November, including scrapping preferential transaction fees, restricting opening contracts and raising deposit standards.

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