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Dalian eyes more derivatives options

(China Daily/Agencies)
Updated: 2009-10-16 08:03

Dalian Commodity Exchange, China's largest derivatives market, may introduce energy, coking coal and live-hog futures contracts to spur trading volume.

The bourse also aims to "be more than just agricultural or energy-oriented", President Liu Xingqiang said. "We're working on products that can be traded more easily as investments; that are more financial in nature. It will be a global exchange." The biggest contracts now include soybeans, soybean oil, palm oil and soybean meal.

Futures trading in China, the third-largest economy, jumped 47 percent in the first half from a year ago, according to data compiled by the Futures Industry Association, as soybean and copper imports climbed to records.

China's "growth in demand for raw materials still outstrips that of any other major country", said Nick Ronalds, executive director for FIA Asia. The "exchanges are likely to continue to grow faster than those of the rest of the world. In a few years, if it liberalizes its markets in time, they could be taking on the Western giants head-to-head".

Trading Surge

Dalian boosted trade by 69 percent in 2008, the most among the world's top 10 derivatives exchanges, and had the biggest volume of the three Chinese markets in the first half, the FIA said. Its other contracts are corn, linear low-density polyethylene and polyvinyl chloride, its website said.

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The Dalian bourse, the Shanghai Futures Exchange and the Zhengzhou Commodity Exchange increased trading to 415.6 million contracts from January to June from 282.7 million a year earlier, the FIA said.

The Dalian exchange is studying coking coal, crude oil, electricity, petrochemical products and live-hog futures. It will "allow a fair amount of speculation to ensure fluidity of the market", Liu said.