(Yicai) Sept. 23 -- Freepoint Commodities completed the first delivery-month position transfer of Shanghai nickel futures by an overseas trader, a milestone that demonstrates the Shanghai Futures Exchange’s newly internationalized nickel futures market is now operational across the entire trading and delivery chain.

Freepoint Commodities Singapore, a unit of the Connecticut-based trading company, successively executed buy-side and sell-side delivery position transfers this month and last month through its broker Orient Futures, shifting its nickel futures positions to a Chinese mainland-based entity under its control, the SHFE announced yesterday.

The exchange pointed out that China’s position as the world’s largest nickel consumer and importer creates substantial demand among nickel businesses for sophisticated risk-management tools. The new position transfer mechanism allows these companies to seamlessly convert overseas positions into mainland inventory and sales, improving their ability to hedge price exposure throughout the international supply chain, it added.

Since the SHFE opened nickel futures and options to overseas participants and qualified foreign investors in April, international participation has steadily increased. Participants now include producers, trading houses, transnational industrial enterprises, and financial institutions from 18 countries and regions, supported by a growing network of registered overseas intermediaries.

The bourse's nickel futures market is growing steadily amid participation from overseas players. Average daily trading volume and open interest reached 357,000 contracts and 343,000 contracts, respectively, between April 22 and Aug. 31, with products from 16 brands, both domestic and foreign, deliverable through the exchange, the SHFE noted.

Established in 1999, the SHFE has grown into one of China’s leading trading venues for commodity derivatives. Six futures and four options, including for nickel, crude oil, and bonded copper, are now open to all overseas traders, while 36 are open to qualified foreign investors, according to its website.

The SHFE will continue to offer more internationalized products, build a well-functioning market, and facilitate participation by domestic and overseas entities by refining its trading and delivery rules, strengthening market cultivation, further opening its market, and upgrading its technological infrastructure and delivery services, it stressed.  

Editor: Martin Kadiev