Fri Apr 15, 2011 7:55am GMT
* September contract opened at day's high of 2,300 yuan/T
* Copper, silver, gold launched on SMX, volumes thin
By Nick Trevethan and Manolo Serapio Jr
SYDNEY/SINGAPORE, April 15 (Reuters) - Coke futures on China's Dalian Commodity Exchange rose more than 5 percent on their debut on Friday on brisk volumes, reflecting strong interest in the world's first futures market for the steelmaking ingredient.
The most-active September coke contract opened at the day's high of 2,300 yuan per tonne, up 5.5 percent from the base price set at 2,180 yuan.
Copper, silver and gold contracts launched on the Singapore Mercantile Exchange also traded on their first day, but volumes were thin.
Coke ended at 2,247 yuan, trading 57,134 lots, equivalent to around 2.86 million tonnes.
Other contracts <0#DCJ:> traded as high as 2,395 yuan.
"Chinese contracts invariably fly off the shelf when they launch. We saw the same in lead, there is huge pent up demand for investment products," said a trader in Hong Kong.
"Like lead, it looks like the authorities are trying to keep the widows and orphans (retail investors) out of the market with the larger lot size. That has proved pretty successful with lead volume around a quarter of aluminium's trade."
China is the world's biggest producer, consumer and exporter of coke, a key steelmaking material.
Analysts and traders say China's coke futures may be considered a global benchmark in the long run, although coke producers said they will wait and see how the contract develops.
"We would rather wait to know how it goes, especially how to account for the different qualities of coke for physical delivery," a coke trader in Beijing said ahead of the launch.
Crude steel output in China, the world's No. 1 steel producer and consumer, is likely to hit a record 700 million tonnes this year, supported by strong demand.
But in a sign Chinese steel mills may be taking it slow in building product inventories with demand just trickling in as construction activity picks up, the country's daily crude steel output dropped 1 percent in March after hitting a record high in February.
SMX copper for July SMCEc1 last traded at $9,486 a tonne, while its equivalent on the London Metal Exchange, the benchmark three month contract, which falls due in three months from the current day last traded at $9,404.
The five-tonne LME-SGX mini copper contract for July SDCUc4 which matches the SMX product in lot size and is also cash settled, traded at $9,445.
Two lots of SMX silver SMSRc1 traded, with the deal done at $42.345 an ounce and one lot of gold SMGOc1 traded at $1,475 and ounce.
"New contracts will take quite a while to get up and running. But people will certainly pay attention to it. If there is enough liquidity, people will certainly become involved," said a Sydney-based trader.
"It will primarily be for speculators. What you really want for a proper contract is to have producer and consumer play the curve. In general, when a new contract starts, producers and consumers tend to be pretty standoff-ish until they can ensure the liquidity is there and will be sustained." (Editing by Himani Sarkar, sourced Thomson Reuters)
* September contract opened at day's high of 2,300 yuan/T
* Copper, silver, gold launched on SMX, volumes thin
By Nick Trevethan and Manolo Serapio Jr
SYDNEY/SINGAPORE, April 15 (Reuters) - Coke futures on China's Dalian Commodity Exchange rose more than 5 percent on their debut on Friday on brisk volumes, reflecting strong interest in the world's first futures market for the steelmaking ingredient.
The most-active September coke contract opened at the day's high of 2,300 yuan per tonne, up 5.5 percent from the base price set at 2,180 yuan.
Copper, silver and gold contracts launched on the Singapore Mercantile Exchange also traded on their first day, but volumes were thin.
Coke ended at 2,247 yuan, trading 57,134 lots, equivalent to around 2.86 million tonnes.
Other contracts <0#DCJ:> traded as high as 2,395 yuan.
"Chinese contracts invariably fly off the shelf when they launch. We saw the same in lead, there is huge pent up demand for investment products," said a trader in Hong Kong.
"Like lead, it looks like the authorities are trying to keep the widows and orphans (retail investors) out of the market with the larger lot size. That has proved pretty successful with lead volume around a quarter of aluminium's trade."
China is the world's biggest producer, consumer and exporter of coke, a key steelmaking material.
Analysts and traders say China's coke futures may be considered a global benchmark in the long run, although coke producers said they will wait and see how the contract develops.
"We would rather wait to know how it goes, especially how to account for the different qualities of coke for physical delivery," a coke trader in Beijing said ahead of the launch.
Crude steel output in China, the world's No. 1 steel producer and consumer, is likely to hit a record 700 million tonnes this year, supported by strong demand.
But in a sign Chinese steel mills may be taking it slow in building product inventories with demand just trickling in as construction activity picks up, the country's daily crude steel output dropped 1 percent in March after hitting a record high in February.
SMX copper for July SMCEc1 last traded at $9,486 a tonne, while its equivalent on the London Metal Exchange, the benchmark three month contract, which falls due in three months from the current day last traded at $9,404.
The five-tonne LME-SGX mini copper contract for July SDCUc4 which matches the SMX product in lot size and is also cash settled, traded at $9,445.
Two lots of SMX silver SMSRc1 traded, with the deal done at $42.345 an ounce and one lot of gold SMGOc1 traded at $1,475 and ounce.
"New contracts will take quite a while to get up and running. But people will certainly pay attention to it. If there is enough liquidity, people will certainly become involved," said a Sydney-based trader.
"It will primarily be for speculators. What you really want for a proper contract is to have producer and consumer play the curve. In general, when a new contract starts, producers and consumers tend to be pretty standoff-ish until they can ensure the liquidity is there and will be sustained." (Editing by Himani Sarkar, sourced Thomson Reuters)
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