ASIA COPPER WEEK 2018: Chinese presence in copper futures market ‘is growing’

China’s presence and influence in the copper futures market is growing, reflected in the significant increase in the number of copper transactions conducted by Chinese participants across major exchanges over the past two years, representatives of major bourses told delegates at Asia Copper Week in Shanghai.

Around 25% of copper transactions on the London Metal Exchange are either done by Chinese participants or are for Chinese brands of metal, Liu Yang, head of corporate sales and China business development for the LME, said during a panel discussion here on Wednesday November 14.

In recent years, Chinese market participants have proved ambitious about trading futures, Liu added.

Hedge demand had increased over the past two years largely because of fluctuation in prices both in the physical market and in futures, the result of Chinese supply disruptions caused by environmental inspections as well as strikes at major producers elsewhere in the world.

LME prices have traded in volatile fashion in a wide range from slightly below $5,000 to $7,200 per tonne since the start of last year, while spot prices in China have fluctuated in a range of 45,000-55,000 yuan.

This opinion was echoed by Wanwan Ge, senior manager at the Shanghai Futures Exchange – daily trading copper volumes on the SHFE have averaged 214,600 lots per day over the same period, he said.

Demand for copper options on the SHFE is set to increase further, building on active trading of those options already, Wanwan said.

As of Friday November 9, there have been 3.3 billion yuan ($473 million) of trades at an average of 12,000 lots per day since the exchange introduced the copper options on September 21.

What to read next
The publication of Fastmarkets’ assessments for nickel 4x4 cathode, nickel briquette and nickel uncut cathode premiums in-whs Rotterdam was delayed on Tuesday July 16 because of a reporter error.
Fastmarkets has corrected its alumina index inferred prices, which were published incorrectly on Tuesday July 15.
The United States' copper recycling industry is ramping up pressure on policymakers to impose some form of export controls on high-purity copper scrap, arguing that current trade dynamics – particularly with China – are distorting prices, weakening domestic capacity and undermining national security goals.
Fastmarkets launched two new price assessments for Indonesia’s domestic trade in nickel ore on Tuesday July 15. The two price assessments are for domestic trades of Indonesian laterite ores with 1.6% and 1.2% nickel content. Indonesia now accounts for 60% of the global nickel supplies and while there is an official government reference price, known […]
US copper scrap market participants are shifting from COMEX to LME pricing in response to extreme price volatility and a new 50% copper import tariff. The change is influencing discount formulas, export strategies and long-term trading dynamics across the sector.
The proposal follows preliminary discussions with the market and internal analysis of price usage, which suggests low market liquidity and a lack of demand. Specifically, Fastmarkets is proposing to discontinue: MB-CU-0410 Copper rod premium, ddp Midwest US, US cents/lbQuality: Purity of 99.95-99.99%. Thicknesses of 8 millimeters or 0.3125 inchesQuantity: Min 25,000 poundsLocation: Delivered US MidwestUnit: US […]