Zhengzhou exchange to trade ferroalloy futures

Updated: 2013-05-06 21:39


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The Zhengzhou Commodity Exchange has recently obtained approval from the China Securities Regulatory Commission to trade ferroalloy futures.

Ferroalloy futures will allow the companies to keep up with prices and manage risks, further completing the futures mix in the iron and steel industry chain, and helping the futures market to better serve the industry.

Ferroalloy is used as a raw material in the steel production process. As the world's largest producer of ferroalloy, China takes up 40 percent of the world's ferroalloy output.

Ferrosilicon and silicomanganese, the major two kinds of ferroalloy, are qualified for futures trading.

China produced a total of 4.78 million tons of ferrosilicon in 2012, which was worth some 33 billion yuan ($5.31 billion). Its output of silicomanganese reached 10.67 million tons last year, which amounted to 70 billion yuan.

China is also the world's largest exporter of ferrosilicon. The export volume reached 621,000 tons in 2011 and 454,000 tons in 2012.

According to the Zhengzhou Commodity Exchange, ferrosilicon and silicomanganese are products without any monopolies or price controls. The products have enough quantity for deliveries and are easy to stock and transport. The risks in terms of trading and deliveries can be controlled.