The China Securities Regulatory Commission(CSRC) enables financial openness by authorizing foreign participation in key futures contracts, including lithium and nickel. Such a strategic move strengthens the Asian country’s position in the global trade of raw materials critical to the energy transition.
International access to Chinese lithium and nickel
In a move expected by the markets, the Guangzhou Futures Exchange has listed futures and options on lithium carbonate futures and options among the products eligible for trading by foreign institutions. This compound, which is essential for the manufacture of batteries, has become increasingly important in the technology and automotive sectors.
The regulatory decision is part of the new provisions issued by the CSRC under Order No. 116, which seek to formalize the participation of international operators in the domestic commodity derivatives ecosystem. With this, China seeks to attract foreign investment and consolidate its futures exchanges as benchmarks in the trading of strategic resources.
In parallel, the Shanghai Futures Exchange added nickel futures and options contracts to the list of products available for international trading. This metal, an essential ingredient for industrial alloys and in the production of high-performance batteries, is considered a vital resource for global supply chains.
These additions bring to 14 the number of commodities authorized for operations with foreign players, expanding the scope of the Chinese commodities market. Moreover, the measure responds to the need to improve transparency, liquidity and standardization in price formation.
This regulatory breakthrough puts China in an even more relevant position in the global strategic natural resource landscape. By allowing foreign investment funds, banks and trading firms to trade lithium and nickel directly on their local exchanges, it fosters the country’s further integration with international trade flows.
The CSRC has instructed the exchanges to ensure an orderly implementation of the process, through operational adjustments and technical controls to ensure an effective and reliable transition. As these reforms move forward, they are expected to have an impact on the global pricing of strategic minerals for the green economy.
Source: CSRC
Photo: Pexels