HKEx to Launch its First Asia Commodities Contracts

Hong Kong Exchanges and Clearing Limited (HKEx) announced yesterday, 22 April 2014, that it plans to launch its commodities business with four futures contracts that will be traded in its derivatives market. The four futures contracts are:

• London Aluminium Mini Futures;

• London Zinc Mini Futures;

• London Copper Mini Futures; and

• API 8 Thermal Coal Futures

HKEx aims to introduce the contracts later this year, pending regulatory approval and market readiness.

HKEx stated that the rationale behind the new business is to meet the needs of the industry in Asia and to provide currency convenience through contracts in RMB.

The new business is a further step to expand HKEx’s commodities business following its acquisition of the London Metal Exchange (LME) in 2012.

Basic market information

The following table contains the basic market information provided by HKEx in relation to the commodities covered by the proposed futures contracts:

Key contract specifications

All four contracts will be traded on the Hong Kong Futures Exchange Limited (HKFE) and cleared through HKFE Clearing Corporation Limited. They will all be monthly cash-settled futures contracts. The key contract specifications which are subject to regulatory approval are summarised in the table below.