On November 19, Dalian Commodity Exchange and China Coking Industry Association (CCIA) signed a cooperation agreement in northern Chinese coastal city Dalian to enhance coking futures development.
According to the agreement, both parties will establish effective communication method to enhance coking futures research and development to meet the requirement of hedging. They will also cooperate to establish a coke futures delivery warehouse and also push forward the development of futures market. Coke futures are a new product category of Dalian Commodity Exchange. Previously, Dalian Commodity Exchange has made long time preparation for coke contracts to enter market. However, the launch date of the new contract is yet to be set. Dalian Commodity Exchange awaits for the approval from China Securities Regulatory Commission.
Huang Jingan, head of CCIA introduced that Chinese coking industry has a large scale of production. China's coke output capacity, export amount and domestic consumption rank first in the world.
"The coke industry is a long industry chain and has many branches. China has lots of private owned coke companies. The market competition is severe and price fluctuates frequently. Companies face risks. The coking industry needs an operation system that can avoid risk and hedge against losses. The coke futures will go into market, which can help coke companies to avoid risk, and also help to adjust coke industry structure and optimization the industry," Huang Jingan stated.