China lends guiding hand to futures markets

Business, China, Markets

The Chinese government appears to have an important objective to achieve while promoting commodity futures trading in the country?

A report in today’s Wall Street Journal says that the government is positioning its futures markets in setting world prices for metal, energy and farm commodities. Jiang Yang, chief futures industry policy maker and assistant chairman of the China Securities Regulatory Commission is quoted as saying that the government has a long-term goal of increasing China’s influence in pricing. Yang also says that futures may assure Chinese commodity importers of ‘fairer deals’.

Pic source: Xinhua

The big implications are for the oil market as China imports huge volumes every year. The Shanghai Futures Exchange is said to have plans of introducing its own contract for crude oil next year. This may not be an immediate threat to the Nymex contract but the development needs to be watched closely especially if it has the support of the Chinese government.

“Beijing believes hosting big futures markets will enhance the country’s economic security by essentially advertising what the world’s biggest customer for some commodities considers a fair price. For the rest of the world, the exchanges could mean less guesswork about China’s buying habits, possibly reducing volatility in the global market.”

The strength of Chinese buying in the physical market has for some time now guided global petrochemical prices. But with the lldPE and PVC contracts turning out to be spectacular hit this year on the Dalian Commodity Exchange will these contracts soon become a reference for global pricing?


Beware of the usual smoke and mirrors


Flying the flag for Q3… Source of picture: Yes, Q3 earnings ...

Learn more

Wearing blinkers is a job requirement


“Take it from me, peripheral vision isn’t all it’s cracked up ...

Learn more
More posts
China moves closer to Iran as tensions with the US build: Implications for petrochemicals

By John Richardson Opinions and emotions and can shape how we interpret data, but, as we all know, o...

China polyolefins market H1 review: so far so good, but beware of the risks ahead

By John Richardson ALL looks fine in the polyolefins world. The Old Normal appears to have reasserte...

Polyethylene market recovery could be threatened by slower China crude buying, weaker economic growth

By John Richardson EVEN by China’s standards, where just about every number is eye-wateringly larg...

Why the polypropylene industry must switch from volumes to value

By John Richardson EVERYONE knows about the oversupply in the polyethylene (PE) market as it has bee...

China consulate closure underlines long-term split with US, potential big shift in petchems trade flows

The views in this blog post are, as always, my personal views and do not reflect the views of ICIS. ...

China’s real GDP could have been negative in Q2: What this may mean for PP

By John Richardson CHINA’S official GDP growth of 3.2% for Q2, which was announced last week, may ...

Iran and China new deal could hasten Belt & Road Initiative petrochemicals self-sufficiency

By John Richardson ONCE AGAIN, please don’t say I didn’t tell you. A proposed new investment and...

China paraxylene imports head for bigger declines as excess industrial production appears to boost GDP

By John Richardson SOME PEOPLE see the 9.9% year-on-year rise in China’s crude oil imports in Janu...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more