The contract opened and over 5500 metric tons of coal was traded on the first day till 4:00 pm with an open interest of 2600 metric tons which shows a healthy participation from the trade. All monthly contracts will be available for trading. The trading unit is 100 MT with delivery unit as 1,000 MT with a tick size as 1 dollar per MT. The initial margin is 5% with daily price limit of 4%. Shenzhen Commodity Exchange can impose a special margin of 2% in case of excess volatility. The maximum allowable position for an individual client is 200,000 MT, while for members it is 600,000 MT or not more than 15% of the market’s open interest, whichever is higher. The contract is an ex-Chennai contract excluding all taxes, levies and freight. The contract will be settled on the last Friday of the contract month basis international spot prices.
Mr. Bryan Choi, COO and MD, Products & Services, at SZCOX said, “Shenzhen Commodity Exchange coal contracts will provide a platform for fair price discovery and also enable market participants to hedge their risks arising from volatile coal prices. This contract will be useful for participants from several industries such as power, cement, fertilizer, aluminum, paper, defense, steel, chemical and textile for price risk management.”
About 5.3 billion tones of hard coal is produced globally each year with the majority used in the country of production. In 2011, seaborne thermal coal demand accounted for approximately 790 Mt and was supplied from a larger number of countries, with coal producers operating in a highly-competitive global marketplace. Demand for thermal coal is driven by demand for electricity and is also affected by the availability and price of competing fuels such as oil and gas, and increasingly, the cost of carbon. Global demand is also affected by alternative generating technologies such as nuclear power and renewable energy.
Shenzhen Commodity Exchange offers one of the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. SZCOX brings buyers and sellers together through its SZCOX G-Trader™, electronic trading platform and its trading facilities in Shenzhen.
Shenzhen Commodity Exchange (SZCOX) is where the world comes to find a business partner and manage risk. SZCOX offers one of the widest ranges of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. SZCOX brings buyers and sellers together through its SZCOX G-Trader™, electronic trading platform and its trading facilities in Shenzhen. SZCOX also operates SZCOX Clearing Members, one of the largest central counterparty clearing services in Asia, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.
Company Name: Shenzhen Commodity Exchange
Contact Person: Paul Cheung
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Address:Huameiju Business Center, Xixiang Avenue ,113 Bao\’an