SHFE’s HRC futures contract set to debut this Friday

The Shanghai Futures Exchange has set March 21 as the launch date for its hot rolled coil futures, the exchange announced late on Monday March 17.

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The contract had just received the nod from the China Securities Regulatory Commission on March 14.

It is time to launch the futures contract, as the SHFE has almost completed its preparation, an official at the exchange told Steel First.

The SHFE had been educating market participants, conducted simulation trading, and determined warehouses and conducted brand registration, he said.

According to a statement on the SHFE’s website, a total of twelve HRC brands from producers including major flats producers such as Baosteel, Wuhan Iron & Steel and Anshan Iron & Steel have been approved by the exchange for the futures contract’s delivery.

A total of 14 delivery warehouses have been designated in the country’s eastern, southern and northern regions. A large number of them are located in eastern China’s Jiangsu province.

At launch, the contract months for the HRC futures comprise July 2014 to March 2015.

Trading is from 9-11.30am and 1.30-3pm, from Monday to Friday. The daily trading limit is 4% of the previous day’s settlement price.

The listing benchmark price for the HRC futures will be published by the SHFE on March 20, the day before the launch, it said.

China is the world’s largest HRC producer and consumer, with an output of 183 million tonnes in 2013 and apparent consumption of 179 million tonnes.

Market participants have been expecting the launch of the HRC futures to help them hedge against risks amid volatility.

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