SHFE plans high-quality development of steel futures

MySteel: In response to the challenges faced by China's steel industry last year such as high production costs and low demand, the Shanghai Futures Exchange (SHFE) has devised a comprehensive plan to develop what it calls high-quality steel futures, aiming at boosting market stability and efficiency, Mysteel Global has learned.

Based on the results of extensive research and on feedback from key steel enterprises and industry organizations, the SHFE has devised a plan that includes optimizing national delivery warehouse layouts in phases and addressing concerns raised by steel enterprises.

With support from the China Iron and Steel Industry Association, the exchange hosted seminars focusing on market operations, explaining the key issues in steel futures trading, and optimizing delivery mechanisms.

Discussions during these seminars centered on improving the convenience of steel futures deliveries by reducing costs, optimizing warehouse layouts, and enhancing delivery resources based on expert feedback.

The first step in the SHFE's project involves refining principles for warehouse establishment and regional pricing mechanisms. The second step focuses on adapting warehouse setups to regional consumption, distribution, and transportation needs nationwide, while the third step aims to further enhance mechanisms as participation grows and regional warehouse layouts improve. Efforts will also include streamlining brand registration and refining rules for steel mills' warehouses.

SHFE's initiative underscores its commitment to supporting China's steel industry transformation through enhanced steel futures. This effort aims to improve the efficiency of futures markets, serving the real economy effectively, Mysteel Global understands.

Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.