HKEx eyes China with new metal contracts
Exchange continues its push into commodities with launch of trading platform for metal and energy contracts targeting deals across the border
Hong Kong Exchanges and Clearing said it will launch several metal and energy contracts aimed at top commodity consumer China, which will begin trading in the city later this year.
The LME, the biggest physical metals exchange in the world, is a wholly owned unit of HKEx.
Two sources familiar with the exchange told the South China Morning Post that the new metal contracts to be launched involve copper, aluminium and nickel. A coking coal contract was added given that China is the world's top consumer. The mainland is likewise the leading consumer of the red metal used widely in construction and power grids.
HKEx chief executive Charles Li Xiaojia said in January that the bourse would introduce the Hong Kong trading platform for commodity contracts in the second half of 2014. All 180 local futures brokers can trade on the platform without applying for LME membership.
The Hong Kong contracts have different specifications from the ones traded in London. They would be settled in cash without physical delivery, unlike the LME which maintains an elaborate network of metal warehouses around the world.
This marks the latest attempt by HKEx to promote commodity trading after paying £1.39 billion (HK$18 billion) in December 2012 to buy the LME.