China's steel futures may debut in early 2009

China's first steel futures contract is expected to be launched on Shanghai Futures Exchange (SHFE) shortly after the 2009 Spring Festival, a source close to the bourse said.

The exchange will begin trading futures contracts on wires and screw steel, which are the two biggest steel products in China in terms of consumption.

Industry insiders told China Daily that the draft contract specifications have been worked out and are soliciting opinions from industry experts.

Steelmakers and traders welcome the new contracts, which serve as an effective hedging tool to help minimize risks associated with price fluctuations in an increasingly uncertain market environment.

After the introduction of the new contract, SHFE will become the world's fourth exchange on which steel futures contracts can be traded. The other three exchanges that have opened steel futures trading are Multi Commodity Exchange of India, Central Japan Commodity Exchange and London Metal Exchange.

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