Shanghai Futures Exchange considers nickel futures to rival London Metal Exchange

The Shanghai Futures Exchange (ShFE) is exploring the possibility of introducing nickel futures for international use, potentially challenging the London Metal Exchange’s (LME) contract. The move comes after a trading crisis in March 2022 severely impacted market confidence in LME’s nickel prices, which had long served as a global benchmark. ShFE is assessing the nickel market’s structure, supply, demand, and other factors at the behest of industry participants seeking alternatives.

To provide international firms access to these futures, ShFE would introduce the contracts on its International Energy Exchange (INE), where commodities like copper, crude oil, and rubber are traded in yuan. The specifics of when the nickel future might launch and its contract specifications remain undecided as ShFE is currently engaging in consultations with the industry.

Two potential deliverable materials for the INE contract being considered are nickel briquette and pressed metal powder. On the other side, CME Group is also exploring the launch of a nickel contract that would settle against prices gathered from a platform to be launched by British-based Global Commodities Holdings (GCH). Abaxx in Singapore is also working towards launching a nickel sulphate contract, the first of its kind, targeting the type of nickel used in lithium-ion rechargeable batteries for electric vehicles.

ShFE’s INE had previously introduced a physically deliverable copper contract in 2020, aiming to bolster the domestic market’s influence over metal prices used in the power and construction sectors. However, the liquidity of the INE copper contract has been low, prompting efforts to expand warehousing networks outside China to enhance volumes and liquidity.

Elevate your business with QU4TRO PRO!

Gain access to comprehensive analysis, in-depth reports and market trends.

Interested in learning more?

Sign up for Top Insights Today

Top Insights Today delivers the latest insights straight to your inbox.

You will get daily industry insights on

Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Russian aluminum producer Rusal targeting China for raw materials supply

The decision by Russian aluminium producer Rusal to acquire a 30% stake in Chinese raw materials supplier Hebei Wenfeng New Materials (HWNM) reflects a significant shift in the global aluminium landscape. This move by Rusal is driven by the need to secure a stable supply…

Copper crunch eases as China’s concentrate imports hit all-time high

China’s copper industry just caught a much-needed break. Imports of copper concentrate surged to nearly 3 million metric tons in April — the highest monthly volume on record. That influx could ease the severe pressure on domestic smelters, which have been operating under extreme stress due to a global ore shortage and surging refining capacity that has crushed processing margins.

China’s smelters, which account for a majority of global refined copper production, have faced an unprecedented squeeze this year. Spot treatment and refining charges (TC/RCs) — the fees miners pay smelters to process copper concentrate — have plunged deep into negative territory, meaning smelters are now paying miners to take the raw material.

Germany’s Covestro gives green light for ADNOC takeover

Covestro, a German plastics and chemicals company, has decided to enter into discussions with Abu Dhabi National Oil Company (ADNOC) regarding ADNOC’s takeover proposal. This decision follows advice that formal takeover talks were in the best interest of Covestro’s shareholders.

Stay informed

error: Content is protected !!