China approves trading of container freight index futures on Shanghai exchange

CHINA’S securities regulator has approved trading of Shanghai container freight index futures on the Shanghai International Energy Exchange (INE), it said on Friday (Aug 11).

The futures is designed to reflect freight rates for containers exporting from Shanghai to European ports and will be open to foreign participants, the China Securities Regulatory Commission (CSRC) said in a statement.

Trading in the futures will start on Aug 18, the INE said in a statement on Friday. The bourse had been preparing for the freight index futures since 2021.

“The new futures contract aims to help firms in exporting and shipping industries to hedge the risks brought by the volatile container freight price,” said the INE in a draft of the container freight index futures last month.

“The launch of the new contract is also in line with China’s strategy to improve its marine logistics,” it said.

Shanghai is the world’s top container port by annual turnover.

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The new futures contract will be traded at 0.1 point per lot with tick size at 50 yuan (S$9.36) per point, according to the INE draft plan.

Daily price limits of the index futures are 10 per cent from the settlement prices of the previous trading session and the minimum trading margin is 12 per cent of the contract value, the bourse said. REUTERS