According to the report issued on February 19 by the China Securities Regulatory Commission (CSRC), the Shanghai Futures Exchange (SHFE) has received the green light for the launch of wire rod and rebar futures.
Currently, the SHFE has already completed the design work regarding the wire rod and rebar futures contracts, has determined objects of the contracts which have great universality and circulation, has studied strict systems for trade, settlement and delivery, and has put in place risk control measures such as a gradient deposit system, a price limit system and a position limit system.
The CSRC will approve the launch of steel future contracts by the SHFE as soon as possible in line with the relevant laws and regulations, on condition that the market risks are controllable, measurable and endurable. Meanwhile, the CSRC will direct and supervise the SHFE to make appropriate adjustments according to the development of the market in the future.
The CSRC report stressed that China has been the largest steel producing country in the world since 1996 when its yearly steel output hit a record level of over 100 million mt. In particular, China produced 489 million mt of steel in 2007, 36.4 percent of the world's total, even more than the cumulative amount for the countries ranking second to eighth.