SHFE, LME team up to launch Shanghai HRC futures contract

On June 17, the Shanghai Futures Exchange (SHFE) and the London Metal Exchange (LME) signed a settlement price licensing agreement that will allow the LME to launch a new hot-rolled coil (HRC) futures contract linked to SHFE prices, giving overseas participants direct access to China's benchmark HRC market, according to an announcement published by the LME.

The new contract -- LME Steel HRC Shanghai -- will be denominated in US dollars and cash settled, with its settlement price linked to the corresponding SHFE HRC futures settlement price. Currency conversion and pricing administration will be handled by Commodity Pricing and Analysis Limited (CPAL), a sister company