Shanghai Futures Exchange Published Draft of Tin and Nickel Futures Contract



Shanghai Futures Exchange Published Draft of Tin and Nickel Futures Contract

Shanghai Futures Exchange published draft for soliciting opinions for tin and nickel futures contract on its official website on January 19, which implies the marketing time of the long awaited tin and nickel futures is drawing near.

According to the draft for soliciting opinions, the transaction unit of tin futures contract is 1 tonne/lot, minimum variation unit is 10 yuan /tonne, daily maximum price fluctuation shall not exceed ±4% of the price on the previous settlement day. The minimum margin is 5% of contract value. The minimum delivery unit is 2 tonnes.

Based on LME tin price USD 19350/tonne on January 19, and the medium price of one USD equivalent to RMB 6.12 yuan on that day, without considering regional price difference factors such as freight, the minimum fund requirement for buying/selling one lot of tin at Shanghai Futures Exchange is 5921.1 yuan.

In the aspect of nickel futures contract design, according to the draft for soliciting opinion, nickel futures contract transaction unit is 1 tonne/lot, minimum variation unit is 10 yuan/tonne, daily maximum price fluctuation will not exceed ±4% of the previous settlement day. The minimum margin is 5% of the contract value. The minimum delivery unit is 6 tonnes. Based on LME nickel price USD 14550/tonne on January 19, and the medium price of one USD equivalent to RMB 6.12 yuan on that day, without considering regional price difference factors such as freight, the minimum fund requirement for buying/selling one lot of nickel at Shanghai Futures Exchange is 4452.3 yuan.

Nickel and tin are among the six basic nonferrous metals. After nickel and tin are marketed, Shanghai Futures Exchange will have all six basic metals available for transaction. According to relevant officers of Shanghai Futures Exchange, after nickel and tin enter the market, these two varieties will be incorporated into Shanghai Futures Exchange nonferrous metal index, this will help promptly reflect China’s overall supply and demand condition of nonferrous metals to the world, and help feed back more voices from China in international pricing factors.

It has been learned that China is the world’s largest producer and consuming country of nickel and tin. Nickel’s main application is for manufacturing stainless steel, high temperature alloy steel, high performance special alloy, and nickel base spray material as an alloy element, most of which is used in stainless steel industry. China is the biggest nickel producer and consumption country in the world. China’s primary nickel accounts for 36% of global total production. Based on the estimated 900,000 tonnes of consumption volume in 2014, the size of China’s nickel spot market tops 100 billion yuan, only next to copper and aluminum among all nonferrous metals.