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China Futures Market Statistics (Aug-2020)

Jan ~ Aug-2020 China Futures Trading Volume up 42.72% YoY, and Notional Value up 34.97% YoY

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China Futures Market Jan- Jul Summary

Jan ~ Jul-2020 China Futures Trading Volume up 43.69% YoY, and Notional Value up 33.70% YoY

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One Year Summary of INE TSR20 Futures

Rubber physical market continue growing
The top China natural rubber companies have invested in natural rubber plantings in Southeast Asia, Africa and other regions in the past ten years. The natural rubber resources operated in international market are already 2.5 times of China domestic market. As a result, there is an increasing demand for price risk management and operational risk management of TSR20, which is the main type of natural rubber produced and utilized in the international market.

Reference:
1. https://mp.weixin.qq.com/s/SS2XzL3rpLsN--G7HR0Zmw

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HTSC Launched Security Lending Platform

On June 30th, Huatai Securities released its online securities lending platform "HUATECH", which is the first online platform in China securities market focus on securities lending. HUATECH provides core functions such as market quotes and order placement and smart matching, committed to creating an integrated platform for securities lending cross the listed and unlisted venues as well as onshore and offshore borders.

 

According to public data, as of June 29, the securities lending market size was ¥31.039 billion ($4.39b), doubled from the beginning of the year but less than 3% of total balance of margin trading. There is still a lot of room to grow to the 20%-30% share in other mature markets.

Reference:
https://mp.weixin.qq.com/s/mYiOOTtIVRFT3mW7tYz_uA

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INE Market Snapshot

On June 22, Shanghai Futures Exchange introduced in 2020 Shanghai Derivatives Market Forum that Shanghai Crude reached an average daily trading volume of 300,000 lots in June and an average daily position of more than 150,000 lots, an increase of 3 times and 4 times respectively from the beginning of the year. The average daily trading volume of foreign investors has accounted for about 16%, and the average daily positions have accounted for about 28%.

Reference:
1. https://mp.weixin.qq.com/s/wEU1zYN7LHs9FZbyhB9tlQ
2. https://mp.weixin.qq.com/s/pTgnhZ_LnEkJ3Q-QFpdzrg

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DCE Limit Control Iron Ore

On June 15th, DCE released Notice of Trading Limit on Iron Ore Futures
(http://www.dce.com.cn/DCE/TradingClearing/Exchange%20Notice/6222237/index.html) stating that starting trade date of June 16th (night session on calendar date June 15th) non-clearing trading member of exchange and client level account, except hedger and market maker, cannot exceed net new positions of 30K lots per day across all iron ore future contracts.
This notice came in with more stringent control after DCE’s Notice of Market Risk Management on June 2nd (http://www.dce.com.cn/DCE/TradingClearing/Exchange%20Notice/6220232/index.html) warning the market risk for Iron Ore futures trading.

Ref source:
1. www.dce.com.cn
2. https://mp.weixin.qq.com/s/zjtXOfmX4cBxbuZE7iX51w
3. https://mp.weixin.qq.com/s/5W-I_gdXMyHlJJZVHs6vtg

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China Low-Sulfur Fuel Oil Futures

The China Securities Regulatory Commission (“CSRC”) has recently approved the Shanghai International Energy Exchange (“INE”), a subsidiary of the Shanghai Futures Exchange (“SHFE”), to launch low-sulfur fuel oil futures on June 22, 2020. This is the 5th internationalized futures after INE crude oil, DCE iron ore, ZCE PTA and INE TSR20 rubber futures.

 

Low-sulfur fuel oil futures will adopt the similar model of crude oil - "international platform, net price trading, bonded delivery, and RMB pricing" - to introduce international investors to participate in the China futures market. It is also the 2nd internationalized energy futures after crude oil.

Reference:

1. Shanghai Futures Exchange – https://mp.weixin.qq.com/s/eAFUn1DCxqIqyjDGjaz8UA
2. CTA Fund Net – https://mp.weixin.qq.com/s/yBk6iG_hkvvmx4A0NEn87g

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TRADING FUTURES AND OPTIONS INVOLVES SIGNIFICANT DEGREE OF RISK AND IS NOT SUITABLE FOR ALL INVESTORS. ONLY INVESTORS WHO CAN ASSUME THE RISK OF LOSS IN EXCESS OF THEIR MARGIN DEPOSITS SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS APPROPRIATE FOR YOU, TAKING INTO ACCOUNT YOUR INVESTMENT EXPERIENCE, FINANCIAL RESOURCES, TRADING OBJECTIVES, THE UNCERTAINTY OF THE MARKETS AND OTHER RELEVANT CIRCUMSTANCES. THIS IS NOT A SOLICITATION TO BUY OR SELL FUTURES RELATED PRODUCTS, BUT A COLLECTION OF INFORMATION REGARDING SERVICES PROVIDED BY HUATAI FINANCIAL USA INC. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.