China exchanges hike fees to snuff out speculators in commodities

They've used hikes as ways to snuff out speculative rallies that the authorities say are not justified by fundamentals

China's commodity exchanges have hiked transaction fees and margin requirements for a range of futures this year in their latest effort to curb speculative trading that Beijing says has spurred recent price surges in markets from sugar to ferro-silicon.

The Zhengzhou Commodity Exchange has hiked transaction fees and issued risk warning statement for ferro-silicon against recent surge in the market.

In the past two years, the Dalian Commodity Exchange, Shanghai Futures Exchange and Zhengzhou have all used fee hikes and position limit curbs as ways to snuff out speculative rallies that the authorities say are not justified by fundamentals.

The following are actions taken since Aug. 11

Dalian Commodity Exchange:

Coke, coking coal

* On Aug. 18, the Dalian Commodities Exchange said it adjusted margins for coke and coking coal futures contract to 12 per cent of its contract value starting on Aug. 22

Iron ore

* On Aug. 18, the bourse curbed positions that non-member investors can take. Non-members are allowed to take a maximum of 6,000 lots for both buy and sell side positions effective Aug. 22. Each lot is 100 tonnes.

* On Nov.24, it cut transaction fee for contracts excluding Jan, May, Sept delivery to 0.0006 per cent of trading value from 0.006 per cent.

Corn

* On Nov.24, Dalian cut non-intraday transaction fee for contracts excluding Jan, May, Sept delivery to 0.2 yuan per lot from 1.2 yuan per lot.

* It also cut intraday transaction fee for corn contracts excluding Jan, May, Sept delivery to 0.1 yuan per lot from 0.5 yuan per lot.

Soymeal

* The bourse cut transaction fee for contracts excluding Jan, May, Sept delivery to 0.2 yuan per lot from 1.5 yuan per lot.

Shanghai Futures Exchange:

Nickel

* On Sept. 21, the bourse raised transaction fees for nickel contract for January delivery to 18 yuan per lot from 6 yuan

* On Sept. 22, the exchange raised transaction fees for nickel contract for January delivery to 30 yuan per lot, up from 18 yuan per lot and curbed maximum transaction size to 1500 lots from Sept. 25.

Lead

* On Sept.25, it halved the intraday transaction fee to 0.02 per cent.

Zinc

* On Aug. 21, the Shanghai Futures Exchange adjusted transaction fees for zinc futures for delivery in October and November to 15 yuan per lot and limit number of such contracts non members can trade each day to 2,000 lots.

* On Oct.17, the exchange limited size of position for non-members at 2,000 lots and adjusted intraday transaction fees to 15 yuan per lot.

Steel

* On Aug. 11, the Shanghai Futures Exchange moved to limit on intraday positions and raise transaction fees on steel rebar contracts with effect from Aug. 15 as it looked to ease a months-long rally.

* In November and December last year, the exchanges increased transaction fees three times on rebar. Trading limits were also put on some contracts.

* On Aug. 24, it raised the intra-day transaction fee for hot-rolled coil steel for some delivery dates and limited positions for non-members.

Fuel oil

* The Shanghai Futures Exchange said on Aug. 15 it would raise margin requirements and transaction fees on fuel oil futures contracts from Sept. 1.

Zhengzhou Commodity Exchange:

Ferro-silicon

* The exchange has twice raised ferro-silicon transaction fees over the past two weeks

* On Aug. 17, the exchange said it will adjust intraday transaction fees to 6 yuan per lot from Aug 21 onwards. On Aug. 30, it said it will raise them further to 9 yuan per lot from Sept. 1

* On Aug. 30, it also said it will adjust trading limits

* On Dec. 6, it hiked trading margins fees to 14 per cent from current 5 per cent, and raise trading limit to 8 pct from 4 per cent.

* The bourse also issued a statement warning of "heightened uncertainties" in ferro-silicon and silicomanganese trading.

Sugar

* On Sept. 12, it raised trading limits on sugar options to no more than 2,000 lots, up from 300 previously.

* On Nov. 22, Zhengzhou adjusted trading margins and trading limit to 10 per cent and 6 per cent respectively.

* On Nov. 23, the bourse cut intraday transaction fees on sugar options to 1.5 yuan per lot from 3 yuan a lot, and adjust options exercising fees to 1.5 yuan per lot.

Cotton

* On Nov.3, Zhengzhou adjusted trading margin and trading limits to 5 per cent and 4 per cent respectively, and halved intraday transaction fee.

Rapeseed

* On Nov.3, the exchange cut intraday transaction fee to 1.5 yuan per lot from 3 yuan previously.