Sept. 12 （Bloomberg） -- China may launch lead futures as early as December offering smelters an investment tool to hedge their risks, an executive at the China Futures Association said, as demand growth slows amid rising capacity and falling prices.
"The launch of lead futures paves the way for a base metals index futures, by which market participants can hedge all the other small metals, given the correlation," Zhang Yisheng, vice chairman of the association, said at a conference in Shanghai. Futures can be used as a tool for producers to hedge the risk of fluctuating benchmark prices.
Lead, the second-worst performer on the London Metal Exchange after zinc, has dropped 11 percent this year as imports by China have tumbled. The country is the world's biggest producer and consumer of the metal used in batteries.
"We can do a better job in risk control by using lead futures," said Hou Ming, a manager at trading firm Shanghai Eagle Metals Co.
The Shanghai Futures Exchange also trades copper, aluminum, zinc, natural rubber, fuel oil and gold. The exchange may launch a range of new futures including silver and crude oil futures, the China Securities Journal reported in December.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
--Helen Sun. Editors: Richard Dobson, Alan Soughley.
豫公网安备41010502003434号