China State Council approves bitumen futures trading in Shanghai

07 June 2013 10:06  [Source: ICIS news]

SINGAPORE (ICIS)--The Shanghai Futures Exchange (SHFE) has obtained approval from the State Council for the scheme of bitumen futures trading, which is due for launch in July, sources from the exchange said on Friday.

Contracts will have 10 tonnes of  AH-70 A-Grade bitumen in one lot. The margin, or deposit amount, will be a minimum 4% of the contract amount, based on the final version of the scheme published at the bourse’s website.

The immediate six months will have monthly contracts, while those beyond will be quarterly contracts.  Physical deliveries can be made within 24 months.

Only qualified brands approved by SHFE can be delivery cargoes. Premiums and discounts on brands are introduced to reflect brand values, but details have yet to be announced.

The SHFE has finalised the list of storages, either storages of domestic plants or commercial storages, as delivery points.

It is currently soliciting comments on how go futher improve delivery policies.

The SHFE will need to conduct platform testing, and secure approval from the China Securities Regulatory Commission for bitumen futures’ trading debut in Shanghai, according to the sources.

China will be the first country in the world to have futures trading for petroleum bitumen.

By: Alfa Li
020-3762 0271

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