China's newest commodity exchange launches industrial silicon futures

The Guangzhou Futures Exchange (GFEX), the youngest of China's five major futures bourses, launched industrial silicon futures on Thursday, aiming to pursue green development and help promote the opening-up of the country's market.

The Exchange has introduced the first batch of five contracts SI2308, SI2309, SI2310, SI2311 and SI2312, with a benchmark price of 18,500 yuan (US$2,651.05) per ton for each contract.

The trading hours of industrial silicon futures are 9am to 10:15am, 10:30am to 11:30am, 1:30pm to 3pm every Monday to Friday, except for legal holidays, and other times specified by the Exchange.

These futures are the first listed product of the new exchange, which was established in April 2021 with a focus on products related to green and sustainable development. The industrial silicon options will start trading on the bourse on Friday.

With open, transparent, and continuous price information, such trading can help silicon producers make reasonable and informed production plans, and allow downstream enterprises to manage the risk of price fluctuations, Hu Zheng, the exchange's chairman, told Xinhua.

Hu believes 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.

The GFEX's new futures contract is considered the world's first for industrial silicon. Analysts believe China's advantage in having a huge silicon market and exports can be translated into having a bigger say in pricing on international markets.

Looking ahead, Hu said the exchange will focus on developing four types of products and the first will be green development – featuring carbon emission rights, electricity, and new energy metals such as lithium, polysilicon and rare earth.

The other three areas will be the commodity index, varieties related to the Guangdong-Hong Kong-Macau Greater Bay Area and the Belt and Road Initiative, and also international market varieties.

"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," Hu said.