Shanghai Shipping Exchange seeks to open futures trading to foreigners
The Shanghai Shipping Exchange (SSE) is asking Beijing's approval to open its container futures trading market to foreigners, freeing it from domestic use restrictions, SSE president Zhang Ye told media in Washington after talks with the Federal Maritime Commission.
The exchange launched its platform on June 28 for domestic use only, which allows mainland Chinese shippers and carriers to trade contracts based on where they believe rates will go on the Shanghai Containerised Freight Index (SCFI) in six months.
The SCFI tracks rates for exports from China, but Mr Zhang said he is planning an index for imports, useful to shippers of price sensitive commodities from the United States to Asia.
Mr Zhang told a joint press conference with Federal Maritime Commission where his SSE delegation had been holding talks with members of the shipping industry to promote the SSE, whose index tracks Shanghai-US west coast and Shanghai-Europe rates.
GFI Freight's Mels Boer said the SSE platform is difficult for European and US companies, which do not do business in China because it is difficult to get the profits they earned out of the country, said American Shipper. But a London-based broker said the SSE success in the derivatives market has been the envy of London and Singapore, where much smaller volumes of container freight swaps are traded over the counter.
The Shanghai index tracks the rate of moving exports containers from Shanghai to 15 world regions. In addition to the SSE's platform for trading derivatives and swaps is based on four components of the SCFI, which are traded on an over-the-counter basis and cleared in London by LCH Clearnet, and in Singapore by SGX.
Those markets have much lower volumes, but Mr Boer said they allow freight to be traded up to three years in the future, and are less restrictive currently to profit-taking European and US companies.
The exchange launched its platform on June 28 for domestic use only, which allows mainland Chinese shippers and carriers to trade contracts based on where they believe rates will go on the Shanghai Containerised Freight Index (SCFI) in six months.
The SCFI tracks rates for exports from China, but Mr Zhang said he is planning an index for imports, useful to shippers of price sensitive commodities from the United States to Asia.
Mr Zhang told a joint press conference with Federal Maritime Commission where his SSE delegation had been holding talks with members of the shipping industry to promote the SSE, whose index tracks Shanghai-US west coast and Shanghai-Europe rates.
GFI Freight's Mels Boer said the SSE platform is difficult for European and US companies, which do not do business in China because it is difficult to get the profits they earned out of the country, said American Shipper. But a London-based broker said the SSE success in the derivatives market has been the envy of London and Singapore, where much smaller volumes of container freight swaps are traded over the counter.
The Shanghai index tracks the rate of moving exports containers from Shanghai to 15 world regions. In addition to the SSE's platform for trading derivatives and swaps is based on four components of the SCFI, which are traded on an over-the-counter basis and cleared in London by LCH Clearnet, and in Singapore by SGX.
Those markets have much lower volumes, but Mr Boer said they allow freight to be traded up to three years in the future, and are less restrictive currently to profit-taking European and US companies.