Shanghai Futures Exchange (SHFE) has inked a deal with Central Japan Commodity Exchange to cooperate in a wide range of fields.

 

According to the agreement, the two bourses will join forces in information sharing, staff training and exchanges, product research and development and market promotion.

 

Industry analysts and experts said such cooperation would not only benefit both exchanges but also boost the development of the region's derivatives market.

 

In 2006, CJCEX ranked fifth among world commodity exchanges in terms of transaction volume in energy products.

 

It trades 10 futures products, including gasoline, kerosene, steel scrap and eggs, since it merged with Osaka Mercantile Exchange this January.

 

CJCEX is one of the few commodity exchanges in the world to trade both steel and energy products.

 

In addition, CJCEX is the largest exchange in the world for gasoline futures. It was the first to introduce trading in steel scrap futures and the only bourse where egg futures are traded.

 

SHFE president Yang Maijun said the exchange would seek more cooperation opportunities with other exchanges and would further expand its product range to better serve the nation's economic development.

 

According to SHFE vice-president Huo Ruirong, the exchange is waiting for the regulator's approval for the introduction of steel futures products.

 

Huo also told China Daily that metals, including silver, nickel and lead, will be the next futures to be launched after gold.

 

The exchange is in the final stages of preparing to launch gold futures, and the China Securities Regulatory Commission is examining the details of the contract. Meanwhile, the exchange is stepping up efforts to educate investors.

 

Industry experts said that the similar product range of SHFE and CJCEX means they could learn from each other and explore business opportunities through cooperation.

 

Both exchanges trade futures contracts for fuel oil, aluminum and natural rubber.

 

(China Daily November 14, 2007)