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October 17, 2016

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Home » District » Pudong

New platform set for the trading of commodities

SHANGHAI will open a pilot online cross-border commodities financial services platform in the Free Trade Zone in February, using electronic warrants and digitalized technology.

The platform has already signed up well-known names, including MasterCard, Singapore’s DBS Bank, Malaysia-based CIMB Bank, Bank of Shanghai and local payment provider ValuePay.

The new system will allow commodities companies registered in the zone to use e-warrants instead of physical documents. It will match companies with commercial banks for lower interest rate loans and insure transparency of transactions in a global network, according to Commodity Info-Tech (Shanghai) Co, which will operate the platform.

“With the launch of e-warrants, we can curb the risk of fake warrants and combine trade information with clearinghouse information to enhance efficiency,” said Wang Lei, general manager of Commodity Info-Tech.

“We expect to expand our partnership with other logistics companies and bonded warehouses registered in the FTZ to promote the use of the platform,” he added.

All parties with access to the platform will be able to get real-time, cross-border payment authentication and data insights to facilitate financing, which in seeks to overcome pain points, such as heavy-handed administration that results in labor-intensive work.

Wang told the media that several companies from Malaysia and Singapore have signed memoranda to use the platform, suggesting further partnerships with potential customers in other Asian countries.

China is a big player in global commodities markets. Last year, the nation was the largest exporter of steel, at 93 million tons. Its prime markets were in Asia. China is also a major importer of iron ore used in making steel.

“Metals trading continues to be a very important area for our customers in China, and across Asia,” said Bruce Allen Alter, head of global transaction services at DBS. “We are confident that we can benefit from this new initiative that leads to the expansion of the Free Trade Zone and China’s market liberalization.”

The platform aims to compete with global commodity trading services such as CWT Commodities, the industrial giant headquartered in Singapore, which is a major commodities hub in Asia.

To achieve that goal, the new platform would have to adopt global operating standards, Wang said.

“The e-warrant platform is one of the most important foundations for commodity trade financing in the Shanghai FTZ, and the first step in creating its international reputation,” Wang said.

“We hope the value-added services offered by the platform will further promote cross-border transactions and collaboration between the various parties — all for greater economic growth.”


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