China listed the pulp futures on the Shanghai Futures Exchange (SHFE) on Tuesday.
The listing of the pulp futures means the further enrichment of China's commodity futures varieties, and also implying the wide space for more commodity futures products to be launched in the future as the country is the second largest economy with a large commodity market, according to Luo Xufeng, general manager of Nanhua Futures.
According to early announcement of the SHFE, the bourse will introduce the pulp futures including SP1906, SP1907, SP1908, SP1909, SP1910 and SP1911, with the benchmark price at 5,980 yuan per metric ton (tonne).
The standard contract of the pulp futures shows that the trading unit is 10 tonnes per lot. The margin requirement is 7 percent of the contract value and the daily limits are set at 5 percent.
According to the SHFE, the daily limits on the first trading day of the pulp futures will be 10 percent of the benchmark price.
Market analysts believe that China is the most important growth market in the global paper and printing industry. In 2017, China's paper and paperboard production and consumption ranked first in the world, accounting for about a quarter of the global total.
In 2017, the number of the sizable papermaking and paper products enterprises each with the main business above 200 million annually was 6,681, in total. The country's total pulp production (including wood pulp, non-wood pulp and waste paper pulp) was 79.49 million tonnes, and apparent consumption was 105.1 million tonnes.
The industry insiders believe that after the listing of pulp futures, it will help to form an open and transparent pricing mechanism for the pulp market, and provide effective risk management tools for upstream and downstream enterprises in the industrial chain to improve operational efficiency and help the industry develop steadily.
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