The Shanghai Futures Exchange, where the world’s top three metals contracts are traded, will increase margins and daily price limits in the latest move by China to curb speculation and cool inflation.
Margins on copper, aluminum, steel wire, gold and fuel oil will rise to 10 percent, the bourse said in a statement. They gain to 12 percent for steel-reinforcing bars and zinc, and to 13 percent for rubber, after the market closes on Nov. 29, it said. Daily price limits for all products will widen to 6 percent from Nov. 30, it said.
China, the world’s biggest consumer of commodities, has pledged to control prices, and may raise interest rates a second time this year to slow the fastest inflation in two years and curb food costs that jumped 10.1 percent in October. The nation has also made trading commodity futures more expensive.
“This is another move aimed at controlling risk and curbing speculation,” Yu Ye, an analyst at Minmetals Futures Co., said by phone from Shenzhen.
The National Development and Reform Commission, the top economic planning agency, said today commodity prices had declined in response to the government’s moves to “clamp down strictly on market manipulation and other illegal activity, and curb excessive speculation.”
Speculative funds have left the market and international prices have dropped, the commission said on website.
Further Measures
“A series of price control measures has helped to cool down the market a bit,” said Wang Zhouyi, deputy manager of the research department at Shanghai CIFCO Futures Co. “We should bear in mind the markets are global, which ultimately means it’s impossible to drive them by policies from one single player.”
The Shanghai exchange said it will suspend a 50 percent trading fee discount for forward contracts of more than six months, and raise the charge for rubber futures to 0.015 percent from 0.01 percent now.
“We may take further regulatory measures, depending on market conditions, to crack down on irregular trading and stop abnormal activities to ensure the market runs smoothly,” the bourse said in the statement.
The steel rebar, zinc and copper contracts were the world’s most traded metals contracts in the first six months, according to the Futures Industry Association. Volume for steel rebars jumped 1,412 percent and for zinc 282 percent, while copper fell 35 percent from a year ago, association data show.
Price Tumble
“This is a tough and decisive move,” Che Hongyun, chief metals analyst at Galaxy Futures, said by phone from Beijing today. “However, I don’t think it will affect the market trend or even the trading activities much.”
The Dalian Commodity Exchange said yesterday it will scrap a measure that lets some investors pay half the normal fees for contracts bought and sold on the same day and will cease other discounts as of Jan. 1. The Zhengzhou Commodity Exchange and Shanghai Futures Exchange said they will extend fees now levied on some contracts to other products.
The government has also sold aluminum, zinc, lead, sugar, cotton and corn this year from stockpiles to ease shortages.
Cotton has tumbled 24 percent in Zhengzhou since reaching a record 33,720 yuan （$5,071） a ton on Nov. 10. Rubber in Shanghai has lost 18 percent from its all-time high and Zhengzhou sugar is down 14 percent. Copper in Shanghai has dropped 11 percent from its high this month.
‘Claim Credit’
“The government can claim credit for achieving its objective in the short term,” Wang Chen, director of research at Wanda Futures Co., said by phone from Beijing. “But these measures won’t change the fact that the world’s farmland faces competition from all crops and global demand is rising.”
White, or refined, sugar listed in Zhengzhou was the world’s most-traded agricultural futures contract from January through June by volume, according to data from the futures association. It was followed by Shanghai rubber and the Dalian soybean-meal and soybean-oil contracts.
Volume for the Zhengzhou sugar contract more than tripled from a year earlier, and Shanghai rubber more than doubled, the association figures show.
The Chinese exchanges’ steps may have a limited effect on world commodities prices, partly because trading is closed to outside investors. The exchanges are open to domestic companies and foreign businesses that operate in China and buy and sell commodities as part of everyday activities.
CME Group, the world’s biggest futures market, this month raised the amount of money traders must keep on deposit for soybean futures by as much as 10 percent. ICE Futures U.S. increased margins for cotton and London-based LCH.Clearnet raised robusta coffee, cocoa and white-sugar charges.
--Helen Sun. Editors: Richard Dobson, James Poole
豫公网安备41010502003434号