The Shanghai Futures Exchange (SHFE) obtained permission from Beijing late last week to begin trading alumina futures.
On Friday, the Securities Regulatory Commission signed off on the plan. With the registration system in place, the SHFE has opened the door to becoming the first exchange on Earth to offer an alumina contract with physical delivery.
In a press statement, the SHFE noted the several advantages to listing alumina futures.
“The listing of alumina futures will enhance the competitiveness for China’s alumina industry and its price influence and also improve companies’ risk-management abilities.”
The SHFE did not say when it would begin to accept alumina futures listings.
Refiners in the People’s Republic of China account for over half of global alumina production. The Middle Kingdom refined 81.86 million metric tons of alumina in 2022, valued at CN¥200 billion (US$28.93 billion).
The SHFE was formed in 1999 as a combination of the Shanghai Metal Exchange, Shanghai Foodstuffs Commodity Exchange, and the Shanghai Commodity Exchange. At present the exchange trades futures contracts in copper, aluminium, zinc, natural rubber, fuel oil, and gold.
The Shanghai Metal Exchange began in 1992 and specializes in listing non-ferrous metals including aluminium, copper, lead, nickel, tin, and zinc. The Exchange is the largest metals exchange in China and the third largest on Earth.