SHFE Aluminum

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SHFE aluminum futures trade on the Shanghai Futures Exchange (SHFE). The contract has been trading since 1991, making it one of the oldest futures contracts in China, along with SHFE copper cathode futures.

Each SHFE aluminum futures contract represents five tons of deliverable grade aluminum ingot, which is defined as standard aluminum (GB/T1196-93) with fineness not less than 99.70 percent with a substitution being LME registered brand P1020A as good for delivery, and its delivery date is set as the 16th to 20th day of the spot month[1].


Each SHFE aluminum futures contract is subject to a margin rate equivalent to 5 percent of contract value (e.g., 4757.5 yuan = 19030 yuan [AL0808 last price on May 23, 2008] x 5 [tons/contract] x 5 percent) as well as a trading fee equal or below 0.02 percent of transaction value/contract.


In 2008, SHFE aluminum futures traded 29,577,840 contracts (+206.60 percent year over year) and its turnover amounted to 2,207.9 billion yuan (+135.43 percent year over year).


SHFE aluminum futures trade rather inactively due to a combination of large domestic producers and small domestic consumers and the fact that China is a major aluminum producing country and therefore hedging pressure is always quite high. Currently, China is the world's top aluminum producing country[2] and major mines are located in Shanxi, Shandong, Henan, Guizhou, Guangxi, and Yunnan[3].


SHFE Monthly Volume by Product.JPG



Aluminum futures
Exchange Shanghai Futures Exchange
Settlement Physically delivered
Contract Size 5 ton/lot
Pricing Unit 5 yuan (RMB)
Tick Value 10 yuan (RMB)/ton
Contract Months January to December
Last Trading Day The 15th day of the spot month
Note: This contract is electronic ONLY -- no open outcry
  No Open Outcry Electronic
Trading Hours N/A 9:00 am to 11:30 am, 1:30 pm to 3:00 pm
Ticker Symbol N/A AL
Price Limits N/A Within range of 4% above or below the settlement price of the previous trading day

References

  1. Aluminum Contract Specifications. Shanghai Futures Exchange.
  2. Shandong nickel producers may cut output. Mining Journal.
  3. Bauxite deposits in China. SpringerLink.