INE launched copper futures contract

SHANGHAI, Nov 23 (SMM) — The Shanghai International Energy Exchange (INE) launched copper futures contract on November 19. Many commodity traders participated in transactions on the first trading day of the international copper futures contract. 47 members and 80 clients participated in the call auction, with the first batch of trading volumes of 267 lots (unilateral). Domestic and overseas copper enterprises that participated in the call auction and reached the first batch of deals include China Base Ningbo Group Co., Ltd., Jiangxi Copper Co., Ltd., Minmetals Nonferrous Metals Co., Ltd., Wanbao Minerals Co., Ltd., Trafigura Investment (China) Co., Ltd., Envy Global Trading Pte. Ltd., Triway Investment (HK) Limited, Sucden Financial Limited, Jiangxi Copper International Trade Co., Ltd., Yunnan Copper Co., Ltd., Hongyuan Hengli (Shanghai) Industrial Co., Ltd., Shanghai Yujiangyuan Trading Co., Ltd., BOCI Global Commodities Limited and Lobb Heng Pte Ltd, etc. Trafigura traded at 47,500 yuan/mt.

The most active BC 2103 contract opened at 47,500 yuan/mt in the morning and reached a high of 47,550 yuan/mt. Prices fell back to around 47,200 yuan/mt after bears increased positions. The contract currently stabilises at 47,100 yuan/mt. As of 10:00 am November 19, BC copper stood at 47,090 yuan/mt, down 580 yuan/mt, or 1.22%. Open interests increased 1,745 lots, driven by bears, with a trading volume of 5,402 lots. The benchmark price of the international copper futures contract stood at 47,680 yuan/mt on November 19.

The theoretical price of the BC 2103 copper contract stands at 46,797.5 yuan/mt, calculated by the formula of (LME + swap fee + Yangshan copper premium) * exchange rate, lower than the closing price of 47,090 yuan/mt. The price difference between BC copper and SHFE 2103 contract stands at around 300 yuan/mt, based on the tax inclusive BC copper price of 53,211.7 yuan/mt. Price spreads between LME, SHFE and INE markets will bolster the enthusiasm of investors to participate in cross-market transactions.

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