First batch of 4,400 copper swaps dealt
Print Edition
SHANGHAI Clearing House yesterday launched the central counterparty clearing business for copper-premium swap trading, which saw the first batch of 4,400 copper contracts traded.
The contracts involved 22,000 tons of copper worth 12.5 million yuan (US$2 million) were completed as soon as the new business started in the city’s pilot free trade zone, SCH said at a launch ceremony.
The central counterparty clearing refers to the process by which financial transactions are cleared by a single counterparty such as a clearing house.
The Free-Trade-Zone Copper-Premium Swap contract, which takes the Yangshan copper premiums index as a clearing basis, is priced, cleared and settled in yuan and traded in lot size of 5 tons.
“The swap will enable copper-related companies to hedge against price volatility and is conducive to Chinese copper traders to boost their pricing power in international markets,” said Xu Zhen, chairman of SCH.
Shipping and commodities-related firms that have opened free trade accounts can trade the contracts.
Ji Zhihong, director of the financial markets department at the People’s Bank of China, said the launch of the new derivative underlined China’s efforts to promote yuan globally and boost cross-border yuan business.
SCH also said yesterday that it plans to offer a clearing business for commodities’ spot trading in the free trade zone this year.
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