SEVERAL futures exchanges took the news of impending tariff cuts badly - in stark contrast to the calm in the Shanghai and Shenzhen stock markets.
Futures prices of key products plummeted when trading opened yesterday morning, although a few bounced back in afternoon trading to close marginally higher.
At the Shanghai Commodity Exchange, the most active January 1996 plywood futures contract took a severe beating, losing 1.10 yuan (about HK$1.02) to close at 38.3 yuan. The March contract ended 0.9 yuan lower at 41.10 yuan.
Jinpeng International Futures research and development manager Li Luejun said: 'The tariff reduction will reportedly apply to plywood imports, leading to cheaper plywood.
'That's not happy news as the plywood demand has never been particularly strong in China.' He said the plywood futures market needed a downward correction and the news announced by President Jiang Jemin that import duties of about 4,000 items would be slashed by a third was the catalyst.
At the Suzhou Commodity Exchange, the January 1996 plywood future dipped 80 fen to end at 38.10 yuan.
The December 1995 contract for red beans at the same exchange dropped more than 60 yuan at 2,240 a tonne, but the price of the February contract went up.
