Shanghai Clearing House to Launch Copper Swap Business This June, SMM Reports

Mar 29, 2016 11:20

Source:SMM

Shanghai Clearing House (SCH) is expected to launch central counterparty clearing business for RMB Copper Swap this June, Shanghai Metals Market reports.

SHANGHAI, Mar. 29 (SMM) – Shanghai Clearing House (SCH) is expected to launch central counterparty clearing business for RMB Copper Swap this June, Shanghai Metals Market reports.

Copper Swap (CUS), priced, cleared and settled in RMB, is tradable during 10:30-18:00 every working day, and settlement price will be based on SMM #1 copper spot price released both on its Chinese (www.smm.cn) and English website (www.metal.com).

“Traders in domestic market are now exposed to risks from big fluctuations of copper spot premiums/discounts, and the swap, in contrast with others, will be conducted on a one-to-one price inquiry mode,” said Zhang Lei, General Manager of Business Innovation of SCH at 2016 SMM Copper&Aluminum Summit in Shanghai.

Dong Chen, SMM Deputy General Manager, also said that the swap will serve as another new tool for domestic copper market players, including traders, upstream and downstream producers, to hedge against risks from changes in spot copper premiums/discounts.

The swap will become the second one with settlement price based on SMM price, following Free-trade-zone Copper-premium Swap introduced by SCH last February.

RMB Copper Swap CCP Clearing Business

Product	RMB Copper Swap （CUS）
Contract size	5 mt
Quote unit	RMB/mt
Minimum price fluctuation	RMB 0.01/mt
Contract period	Monthly contract for 12 consecutive months
Trade data receipt time	Working days: 10:30 -18:00
Expiration	The 15^th day of expiration month (the next working day if a public holiday falls on the 15^th day)
Last trading day	The previous working day of expiration day
Final settlement date	The first working day after expiration date
Forward price	Based on forward price released by Shanghai Clearing House
Final settlement date	Based on SMM #1 copper spot price (accurate to single digit)

Difference between CUS and FCP

	CUS	FCP
Object	Full price of #1 copper (including spot premium/discount)	Yangshan copper premiums (the first premium derivative in the world)
Market	Market in China but outside the Shanghai Free Trade Zone	Market in the Shanghai Free Trade Zone
Account	RMB account	FT account, cross-border RMB settlement
Agreement expiration date	The 15th day of expiration month (the next working day if a public holiday falls on the 15th day)	The last working day of the expiration month
Final settlement price	Based on SMM #1 copper price on the expiration date	Based on arithmetic daily average Yangshan copper premiums for agreement month released by SMM

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.

Shanghai Clearing House

copper swap

Yangshan copper premium wrap

Yangshan Copper Premium

China copper premiums

For queries, please contact William Gu at williamgu@smm.cn

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Shanghai Clearing House to Launch Copper Swap Business This June, SMM Reports

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