The Shanghai Futures Exchange pioneered China's recycled materials derivatives market Tuesday with the debut of cast aluminum alloy futures and options for trading, a strategic move to help manufacturers hedge costs in the world's largest aluminum recycling sector.
Cast aluminum alloy is a type of aluminum product primarily made from recycled scrap aluminum, which is smelted with copper, silicon and other elements before being shaped into semi-finished products or components through casting processes.
This material finds wide application across automotive, motorcycle and mechanical equipment industries.
China currently stands as both the world's largest producer and consumer of cast aluminum alloy, with annual production reaching approximately 6.2 million tons in 2024.
"As China's first renewable commodity futures and options variety, the listing of cast aluminum alloy futures and options can give play to the functional role of the futures market and effectively promote green and low-carbon transformation of China's non-ferrous metals industry. It has also supplemented the risk-hedging toolkit for the aluminum supply chain, and will form a synergy effect with the existing upstream aluminum oxide futures and options and midstream alumina futures and options, which will better serve the needs of real-economy development and circular economy construction," said Lu Dongsheng, CEO of Shanghai Futures Exchange.
Trading volumes at the Shanghai Futures Exchange showed robust growth in trading in the first five months of this year, with the trading in 23 futures products generating approximately 111.2 trillion yuan (nearly 15.5 trillion U.S. dollars) in total turnover, a 25.9-percent year-on-year increase.
Several commodities stood out with particularly strong performance during the January-May period.
The trading value for No. 20 rubber futures skyrocketed 162.5 percent compared to the same period last year, while the trading in petroleum asphalt futures saw a 123.6-percent surge. Natural rubber futures also posted solid growth with a 31.7-percent increase in turnover year on year.
"Global economic and geopolitical risks have escalated significantly. In particular, the current turbulent trade environment has created substantial operational uncertainties for real businesses, leading to a sharp increase in hedging demand, which has been a key driver behind the remarkable expansion in overall trading volumes," said Li Qiang, director of Xinhu Futures Research Institute.
China launches listing of first recycled metal futures
China launches listing of first recycled metal futures
