Shanghai has introduced 18 measures designed to strengthen the city's position in the global non-ferrous metals market, according to an announcement made on Jan 20 by the Shanghai Municipal Financial Services Office, the Shanghai Futures Exchange, the Shanghai Clearing House, and the Shanghai Municipal Commission of Commerce.

The plan seeks to integrate futures, spot, and over-the-counter derivative markets to enhance Shanghai's resource allocation capabilities and expand global pricing influence in non-ferrous metals.

The measures support closer collaboration between the Shanghai Clearing House and the Shanghai Futures Exchange in areas such as clearing and risk management. They also encourage greater participation in futures and OTC derivatives markets by companies in sectors including automotive, construction, and appliance manufacturing, helping them better manage price volatility.

According to the plan, Shanghai plans to further open its non-ferrous metals futures market to international participants. It will also explore cross-border delivery mechanisms and offshore warehousing, expanding the reach of "Shanghai prices".

The initiative also aims to build a more resilient market ecosystem by attracting leading market players, fostering collaboration across the supply chain, and promoting the application of blockchain technology for data sharing.

Legislation related to warehouse receipts has also been identified as a priority, reinforcing market transparency and trust.

Currently, Shanghai hosts a comprehensive metals market that integrates futures, spot, and OTC derivatives trading.

The Shanghai Futures Exchange lists 11 non-ferrous futures and 10 options, with several, including "Shanghai copper", having become globally recognized benchmarks.

Since 2013, the Shanghai Clearing House has provided clearing and risk management for OTC commodity derivatives, including those linked to non-ferrous metals.

Shanghai has also developed platforms, such as Shanghai Metals Market and Shanghai Metal Exchange, and established Shanghai Guomao Holding Co Ltd to participate in global commodity allocation.

Source: Shanghai Observer