As one of the earlier futures listed in China, copper futures is about to start the internationalization journey of non-ferrous metal futures. On November 11, the last phase of Energy announced the international copper futures contract and related rules, taking a key step before the official listing.
Matters related to the listing and trading of international copper futures
According to the notice issued by the previous issue of Energy, international copper futures will be listed for trading on Thursday, November 19, 2020. On the same day, the auction will be assembled at 08PUR 55tel 09RV 00, and the market will open at 09:00. The listing contract is BC2103,BC2104,BC2105,BC2106,BC2107,BC2108,BC2109,BC2110,BC2111. The benchmark price for listing is announced by the Energy Center on the trading day before the listing. As far as trading hours are concerned, from Monday to Friday, there are 09mm 10, 10, 30and 1330, respectively, from Monday to Friday, and the trading hours are continuous. From Monday to Friday, the trading hours are 21: 00-01:00 the next day. Trading does not take place during the consecutive trading period of the first working day before the statutory holiday (excluding Saturdays and Sundays). In terms of trading margin and trading limit, the trading margin is 8% of the contract value; the range of trading limit is ±6%, and the range of trading limit on the first day is twice that of it.
It is worth noting that foreign exchange funds can be used as deposits by overseas special non-brokerage participants and overseas clients. If the foreign exchange fund is used as the margin, the midpoint of the RMB exchange rate announced by the China Foreign Exchange Trading Center on the same day shall be used as the benchmark price for its market capitalization. At present, the foreign exchange currency that can be used as a margin by the Energy Center is US dollars, with a discount rate of 0.95. Before the market closes on the same day, the market value of foreign exchange funds shall be calculated according to the midpoint of the RMB exchange rate announced by the China Foreign Exchange Trading Center on the previous trading day. At the time of daily settlement, the benchmark price for the use of foreign exchange funds as margin shall be re-determined and the converted amount shall be adjusted in accordance with the above-mentioned methods. In terms of position announcement, when a contract closes with 15000 positions (unilateral), the Energy Center will announce the trading volume, buying and selling positions of the top 20 futures company members and foreign special brokerage participants in that month.
International copper futures contract and related rules
According to the reporter's understanding, the contents of the international copper futures contract and related rules officially released this time are consistent with the consultation version issued on October 16, and there are three points worth paying attention to: First, the international copper futures price does not include value-added tax, the contract trading unit is 5 tons per hand, the minimum change price is 10 yuan / ton, the range of the limit is ±3% of the settlement price on the previous trading day, and the minimum trading margin is 5% of the contract value. The contract delivery month is from January to December, and the delivery date is five consecutive trading days after the final trading day, and the delivery unit is 25 tons. Second, the international copper futures and the previous copper futures are consistent in the determination of trading unit, quotation unit, minimum change price, contract month, trading time, final trading day, delivery unit, settlement price and so on. Third, there are differences between international copper futures and Shanghai copper futures in price meaning, delivery grade, delivery mode, delivery date, position limit in different stages of operation, trading code and so on. In terms of delivery grade, the delivery standard of international copper futures is in line with the national standard GB/T467-2010 A copper regulations, or BSEN1978:1998 A copper regulations; in different stages of the general position restriction ratio and position limit, in order to effectively prevent and control risk, international copper futures in the initial stage of the contract listing compared with the previous period of copper futures position limit has been narrowed. The official said that forward-looking and prudent design ideas will help international copper futures to operate smoothly and function well at the initial stage of listing.
The first international futures contract in China to operate in a "double contract" mode.
International copper futures is the first international futures contract in China to operate in the mode of "double contract". The overall design idea is to list international copper futures in the last period of energy with a specific variety mode on the basis of keeping the copper futures of the previous period unchanged. That is, the "double contract" mode. The person in charge of the previous issue of energy told Futures Daily that the "double contract" model is based on new business launched by the bonded market and the international market without changing the existing domestic market pattern. It is helpful to carry out new business in an orderly manner on the premise of ensuring the smooth operation of copper futures contracts in the previous period. "on the one hand, the copper futures of the previous period are based on the tax-containing market within the customs border, reflecting the relationship between supply and demand in the domestic market, and its price has become the pricing basis for domestic spot trade; on the other hand, international copper futures face a tax-free market outside the customs border, reflecting the relationship between supply and demand in the international market." He explained. He said that in order to ensure the smooth operation of international copper futures, the last phase of Energy has always taken serving the real economy as the starting point and foothold of all work, carried out in-depth market research and research on international copper futures, and formulated targeted trading, settlement, delivery and risk control measures to promote the stable listing and steady operation of international copper futures. Specifically, first, according to the overall risk control requirements and the characteristics of different stages of contract operation, scientifically set up the limit board and margin system to effectively prevent the transaction risk; second, reasonably set up the speculative position limit system, hedging trading position to implement the examination and approval system; third, according to the development of the market, expand deliverable resources, reasonable layout of delivery warehouse, effectively prevent delivery risk; Fourth, multi-level and in-depth investor education should be carried out to ensure the healthy and stable operation of international copper futures. For all kinds of participants in the international copper futures market, he suggested that investors should fully understand the risks of participating in futures trading, be familiar with international copper futures contracts and relevant business rules, and participate in futures trading rationally. enterprises in the upper and lower reaches of the copper industry chain should understand, be familiar with and master the rules of the futures market, and constantly improve the level of hedging by using the futures market in practice. Member units should fully understand and master the laws and regulations of the futures market, achieve compliance operation and risk control, and help investors make full use of the functions of international copper futures hedging and price discovery to serve the real economy.
It provides a brand-new risk management tool for industry and industry.
In the view of GE Honglin, party committee secretary of China Nonferrous Metals Industry Association, the launch of the last issue of energy international copper futures provides a new risk management tool for the entity enterprises of the copper industry chain in China and even the world. it further meets the diversified risk management needs, provides transparent and fair international market prices denominated in RMB for the industry, and contributes to the high-quality development of China's non-ferrous metals industry. He expects that the last issue in the future will continue to focus on the interaction between future and present, the combination of industry and finance, and steadily promote the process of internationalization of non-ferrous metal futures. "China is a big producer, consumer and importer of refined copper, and it is expected that the far East market, represented by China, will continue to contribute a major increase in copper production, consumption and trade in the future." Paul White, secretary-general of the International Copper Research Group, said that the international copper futures launched by the last issue of Energy will help global investors participate in the formation of the "Shanghai price", thus further enhancing China's international influence in the global copper industry. At the same time, he also expects the International Copper Research Group to continue to strengthen cooperation with the previous phase of energy and the last phase of the Institute. As an important domestic copper enterprise, Xu Changning, director of futures business of Tongling Nonferrous Co., Ltd., believes that the launch of the last issue of energy international copper futures has added a "sharp weapon" to the hedging toolbox of copper enterprises. its characteristics of net price trading and bonded delivery reduce the hedging cost of enterprises and avoid the risk brought by the change of value-added tax rate. The RMB pricing model adds a new choice for the spot settlement of enterprises in the process of import and export trade in the future, which effectively reduces the exchange rate risk; the international platform enables global investors to fully participate in the formation of copper prices in Shanghai, helping to enhance its international influence. Zhang Jianhui, manager of the Futures Management Department of Yunnan Copper Co., Ltd., also said that the listing of international copper futures has added a market option for copper smelters to process and re-export copper products. Enterprises can compare the prices of domestic copper futures "double contracts" with LME copper futures and select the most favorable quotation for spot trading. In addition, the RMB pricing mode of international copper futures is very convenient and the delivery process is shorter, which avoids the foreign exchange risk of domestic enterprises in the transaction and helps to reduce costs. "the launch of international copper futures will help to enhance the influence of China, the world's largest copper consumer market, especially if foreign mines, smelters and traders can agree in spot contracts that the benchmark price is the international copper futures contract price in the future. it will have a significant impact on domestic and foreign copper spot trading, which is of great significance to enhance the price influence of Chinese copper." Zhang Jianhui said.
