Guangzhou Futures Exchange Launches Trading in Silicon Futures

GFEX (Guangzhou Futures Exchange) on Thursday (22 December) launched trading in industrial silicon futures, the very first product launch since the exchange was established.

GFEX was established in April 2021 as China's fifth futures exchange to focus on products related to green and sustainable development, including new energy materials like lithium and rare earth elements.

The CSRC (China Securities Regulatory Commission) granted approval for the launch earlier this month, saying the new products will help improve the price formation mechanism of industrial silicon and enhance the risk management abilities of market entities.

GFEX chairman Hu Zheng said the new contracts will promote open, transparent, and continuous price information, which will help silicon producers make reasonable and informed production plans, while also allowing downstream enterprises to manage price fluctuations.

Hu added that the introduction of industrial silicon futures and options will strengthen the resilience of related industrial chains and help build new growth engines that include new energy and green industries.

Five industrial silicon futures contracts were launched at the open of trading on Thursday (options start Friday), making GFEX the world's first exchange to trade in silicon.

The trading hours of industrial silicon futures are 9:00 am to 10:15 am, 10:30 am to 11:30 am, and 1:30 pm to 3:00 pm – every Monday to Friday except public holidays.

In a statement, the CSRC welcomed the launch of the new industrial silicon futures and options products. "The listing of industrial silicon futures and options is an important beginning for the construction and development of Guangzhou Futures Exchange," said CSRC chairman Fang Xinghai.

Moving forward, Hu said GFEX will focus on developing four types of products. The first will be green development – including carbon emission rights, electricity, and new energy metals such as lithium, polysilicon and rare earth.

The other three areas will be commodity index varieties related to the Greater Bay Area, the Belt and Road Initiative, and the international market.

"The GFEX aims to develop into a global new energy metal pricing center," Hu said, adding that the bourse will launch more new energy metals futures and actively improve connectivity with the outside world.

"We are ready to discuss cooperation models with global partners and promote the opening-up of China's futures market at a higher level," he added.

Source: Regulation Asia