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Factbox: China commodity exchanges act to contain coronavirus-driven volatility


© Reuters. Cranes unload coal from a cargo ship at a port in Lianyungang

BEIJING (Reuters) – China’s commodity exchanges have rolled out measures, from raising margin requirements and trading limits to halting trade completely, to try to maintain market stability as the coronavirus panic grips the globe.

Below is a list of some of the actions taken, affecting trade in anything from eggs to gold in the world’s biggest commodities consumer.

CRUDE OIL/RUBBER

* The Shanghai International Energy Exchange (INE), responding to a collapse in global oil prices, raised the trading margin on its futures contract to 11% from settlement on March 11, and hiked the trading limit to 10% from March 12.

* The INE said it would waive delivery fees for its crude oil and TSR 20 rubber futures from April 10 this year until Jan. 8, 2021 to ease financial pressure on market participants.

* The Shanghai Futures Exchange (ShFE) increased the trading margin on TSR 20 rubber futures to 11% from 10% after settlement on March 23 and raised the trading limit raised to 9% from 8%.

* The Shanghai INE said it would raise the margin requirement for the May contract of crude oil futures to 15%, starting from the settlement on April 14.

SHFE

* The ShFE said on March 13 it was raising trading margins and limits on a large number of commodity futures contracts, including base metals, steel rebar, hot-rolled steel coil and fuel oil.

* It said the trading margin for aluminium, zinc and lead futures contracts would be further raised to 10% from 8% after settlement on March 23, while the trading limit on those contracts would be increased to 8% from 6%.

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* The bourse said the trading margin for its contract would be further increased to 10% from 8% and the trading limit raised to 8% from 6%. The margin requirement and limit for tin have also been raised to 10% and 8%, respectively, ShFE said.

* The bourse has said it would waive delivery fees for 16 products – including base metals, steel, gold, silver and fuel oil – from April 10 until Jan. 8, 2021

PRECIOUS METALS

* The Shanghai Gold Exchange (SGE) on March 16 said it would raise margin requirements and trading limits for gold and silver contracts after big price fluctuations.

* The bourse said it would impose a one-day halt on trading in its Ag (T+D) silver contract on March 18, after the contract fell by 13%, and would take measures to reduce market risk.

* Margin requirements for gold contracts were cut to 8% from 10% following settlement on April 7, with their trading limits to be lowered to 7% from 9% starting on April 8. The trading margin for silver contracts fell to 11% from 14% from April 7 settlement, and the trading limit to 10% from 13% with effect from the next trading day.

DCE

* The Dalian Commodity Exchange (DCE) said on March 4 it would raise trading limits and margins on its egg futures contracts for May and June delivery.

* It then raised transaction fees for the April and May egg contracts. (https://

* The DCE said it would raise the trading limit for styrene futures to 9% and margins to 11% from settlement on March 19.

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* On Friday, the DCE said it would adjust the trading limits for its polyethylene and polypropylene futures contracts to 6%, while setting margin requirements to 7% from settlement on March 23.

* DCE also said it would change the daily limit and margin requirements of its ethylene glycol futures contract to 9% and 11% respectively.

* The Dalian exchange adjusted trading limits for iron ore, coking coal and coke futures contracts to 7% from 6% from March 25.

* The DCE also raised trading limits for palm oil and egg futures contracts to 6% from March 25.

* The exchange said it would adjust trading limits for soybean, soymeal, soyoil and PVC futures contracts to 5%, and change margin requirements for these derivative products to 6%

ZCE

* China’s Zhengzhou Commodity Exchange (ZCE) raised the margin requirement for PTA futures contracts from May to December deliveries to 7% from settlement on March 25.

* The ZCE also raised trading limits for PTA and Methanol futures contracts from April to December deliveries to 6% from March 26.

* The Zhengzhou exchange raised the margin requirement for cotton futures contracts to 7% and the trading limit to 6% from settlement on March 25.





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