MYSTEEL: How SHFE's new steel options reshape risk management

The Shanghai Futures Exchange (SHFE) officially released contract specifications for options trading in stainless steel and hot-rolled coil (HRC) on July 24, following approval from the China Securities Regulatory Commission. Trading for both is expected to commence in August, analysts suggest, consistent with the typical two-to-four-week gap between contract announcement and listing.

The approval adds two new risk management tools to China's steel complex, broadening the hedging toolkit beyond the existing futures contracts, a Mysteel stainless analyst notes. Both options are structured with American-style exercise, a method that allows buyers to exercise on any trading day before expiry, according to the contract