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Shanghai Clearing House to Launch Copper Swap Business This June, SMM Reports
Mar 29,2016 11:20CST
industry news
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 15th day of expiration   month (the next working day if a public holiday falls on the 15th   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


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Shanghai Clearing House
copper swap
Yangshan copper premium wrap
Yangshan Copper Premium
China copper premiums

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