Trading of steel futures gets authorization in Shanghai, China

Foreign Alternative Investments: According to the China Securities Regulatory Commission, China’s largest commodity-futures, the Shanghai Future Exchange has been valued as the stock exchange and has succeeded in achieving the approval for contracts of steel trade. The contract details or any date for starting the trade is not yet published but the future enlistment of the future of steel reinforcement bars and wires rods have been approved so far.

China has faced a record of six years low in price of steel in November, which has come down up to 52 percent since June. China is considered as the largest consumer of Steel and the trade had reached up to 87 percent last year with the increase in demand of raw materials and price instability affected the buyers.

Today, Shanghai steel futures is supposed to be in a position to evaluate with that of London Metal Exchange. The crude steel production of China was comparatively high than that of North America, South America, European Union and Russia even after the worldwide recession. China alone contributed up to 38 percent of the global output, as per the World Steel Association in Brussels.

However almost half of the steel production in China is used in buildings and the government is planning to expend $585 to maintain the economy of the country. Baosteel Group Corp., which is the largest steelmaker of China, has increased the prices on some of its products. The head of the steel futures business is of the opinion that the trading of steel futures is likely to reach up to double of the present volume.