BEIJING (AFX-ASIA) – The Shanghai Futures Exchange has released a draft version of the fuel oil futures contact on its website today to solicit public opinion, after obtaining initial regulatory approval last week to start fuel oil futures trading.
The exchange has set the minimum size of each contract at 10 tons, and the minimum trading deposit at 8% of the total contract value.
Trading prices can float by a maximum of 5% each day from the previous closing price, and commission is capped at 0.02% of daily turnover.
The official Xinhua news agency said yesterday that the country’s stock market regulator had approved the exchange’s application to trade fuel oil futures “at an appropriate time after the exchange completes various preparations”.
China began fuel oil futures trading in 1993, but closed it down two years later because of persistent problems with irregularities. It also feared that heavy speculation on the futures
market might drive up spot prices.
But big oil users, including airlines, and some economists have been calling for the resumption of trading to hedge price fluctuations on the international market.
China is now the world’s second-largest oil consumer. Demand and imports have soared on the back of surging economic growth.