China's Shanghai Clearing House launches RMB IO swaps
Source: Mysteel
May 07, 2018 19:04
Shanghai Clearing House (SCH) in East China’s Shanghai Municipality launched the Chinese Yuan-priced iron ore swaps on May 7, just three days after the iron ore international trading commenced on the Dalian Commodity Exchange.
As of 1500 on the first trading day, a total of 1,180 lots or 118,000 tonnes of iron ore were traded, valuing Yuan 50.06 million ($7.88 million) in all, both in single counting, according to a SCH official, without sharing the breakdowns of trading for each contract month.
SCH prices its iron ore swaps in the Chinese Yuan by converting Platts’ 62% iron ore pricing index in US dollar with the daily middle exchange rate, and has launched 36 continuing months of contracts for this derivative product. The daily trading hours are 1030-1800 (Beijing time) but are shorter at 1030-1500 for the last working day of the month, according to SCH’s contract specifications.
SCH’s swaps are traded via brokerages and cleared with banks instead of on screen, and on the first day, two brokerages including Shanghai Fengte Investment, an affiliate of Shanghai Ganglian Holdings, were the first to conclude deals for their institutional investors and Shanghai Pudong Development Bank and China Construction Bank were the first to provide clearing services, according to SCH.
A ferrous derivatives analyst in Shanghai, nevertheless, expressed little enthusiasm at the SCH’s iron ore swaps for now.
“My job is to understand the iron ore market, and invest accordingly, as for now, I think DCE iron ore futures have been serving my needs just fine, but of course each derivative product serves different purposes, so in the long run, we will need to extend to swaps and options too,” he said.
SCH, incorporated in November 2009, launched its first Chinese Yuan-priced iron ore swaps in 2004 by referring to three index providers – Mysteel, Umetal and China Beijing Mining Exchange (now renamed as COREX).
As of now, a few exchanges including DCE, SCH, Singapore Exchange, Hong Kong Exchange and Chicago Mercantile Exchange are among the few to have launched iron ore derivative products.
You May Also Like
FMG ships 47.5 mln t of iron ore in Jul-Sept, up 4.2% YoY
Oct 27, 2022 12:00
BHP's iron ore unit cost climbs 13% on year in FY22
Aug 16, 2022 18:30
Vale's Q2 iron ore fines prices down, but costs rise
Jul 29, 2022 17:30
FMG raises its FY'23 iron ore shipments to 187-192 mln t
Jul 28, 2022 13:00
FMG's Apr-Jun iron ore production table
Jul 28, 2022 08:54