(Reprinted from: Green Dahua Futures Information)
The Shanghai Futures Exchange (hereinafter referred to as the Shanghai Futures Exchange) will list and trade cast aluminum alloy futures at 9:00 on June 10, 2025. The listing time for cast aluminum alloy option contracts is 21:00 on June 10, 2025. In order to ensure the smooth launch and stable operation of cast aluminum alloy futures and options, on May 26, 2025, the Shanghai Futures Exchange issued a content of cast aluminum alloy futures contracts, option contracts and business rules, notices on matters related to the listing and trading of cast aluminum alloy futures and options. The relevant person in charge accepted media interviews on issues such as cast aluminum alloy futures and option contracts and business rules.
01.
Why launch cast aluminum alloy futures and options?
Cast aluminum alloy is an aluminum alloy that uses scrap aluminum as the main raw material, and after melting with copper, silicon, etc., and then generates blanks or parts through the casting process. Cast aluminum alloy is the main way to recycling scrap aluminum, with significant energy conservation and emission reduction effects. It is an important product for the low-carbon transformation of the global aluminum industry. It belongs to the resource recycling industry and remanufacturing industry that my country is vigorously promoting the development. The listing of cast aluminum alloy futures and options is mainly based on the following three considerations.
First, serve the country's “dual carbon” strategy and serve the green and low-carbon development of my country's aluminum industry.The “Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese-style Modernization” proposes “improving the green and low-carbon development mechanism” and “implementing fiscal, tax, investment, price policies and standards systems that support green and low-carbon development.” The “Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Comprehensive Green Transformation of Economic and Social Development” proposes the goal of basically forming a green production mode in 2030, a green and low-carbon circular development economic system in 2035, and an annual utilization of bulk solid waste by 2030 to reach about 4.5 billion tons. The launch of cast aluminum alloy futures and options, and scientifically set trading and delivery rules will help further improve the market and standards for recycling scrap aluminum, support the best and limit the worst, and help my country's aluminum industry green transformation and high-quality development.
The second is to give full play to the price discovery function and enhance the influence of the “Chinese price” of the aluminum industry.my country is a world's largest aluminum industry country and has built a complete industrial chain of “bauxite-alumina-electrolytic aluminum-aluminum processing-aluminum application-recycled aluminum”. Listed cast aluminum alloy futures and options will help to form a standardized, transparent and efficient cast aluminum alloy pricing mechanism, timely and objectively reflect changes in market supply and demand and expectations, and work together with alumina futures and electrolytic aluminum futures to enhance the influence of the “Chinese price” of the aluminum industry.
The third is to improve risk management tools for real enterprises to help the high-quality development of the aluminum industry.In recent years, my country's aluminum industry chain has developed rapidly upstream and downstream, especially in industries such as new energy vehicles, which has driven the increase in demand for cast aluminum alloys, and the demand for price risk management of related companies is becoming increasingly strong. The launch of cast aluminum alloy futures and options can provide effective tools for physical enterprises to manage price risks and help enterprises operate stably; at the same time, physical enterprises expand their spot circulation channels through physical delivery, becoming a useful supplement to achieving stable sales and procurement.
02.
What are the areas worth paying attention to in the contract and related business rules of cast aluminum alloy futures and options?
Under the framework of the existing business rules of the Shanghai Futures Exchange, the revisions of rules related to cast aluminum alloy futures and options are mainly reflected in the following aspects: First, formulate the “Shanghai Futures Exchange Cast Aluminum Alloy Futures Contract” and the “Shanghai Futures Exchange Cast Aluminum Alloy Futures Contract”; Second, formulate the “Shanghai Futures Exchange Cast Aluminum Alloy Futures Business Rules”, involving relevant regulations on cast aluminum alloy futures trading, delivery, risk management, etc.; Third, revise the “Shanghai Futures Exchange All Ferrous Metals Delivery Commodities Management Regulations”.
There are two points worth paying attention to in the cast aluminum alloy futures contract and its related business rules: First, the trading unit of the cast aluminum alloy futures contract is 10 tons per lot, and the delivery unit is 30 tons per standard warehouse order. The delivery should be delivered at an integer multiple of each standard warehouse order; before the closing of the last trading day of the first month before the delivery month, the positions of each member and each customer in the cast aluminum alloy futures contract of each member should be adjusted to an integer multiple of 3 lots (if the market cannot be adjusted on time, it can be postponed for one day); after entering the delivery month, the positions of the cast aluminum alloy futures contract should be an integer multiple of 3 lots, and the newly opened and closed positions should also be an integer multiple of 3 lots.
Second, the special invoice for cast aluminum alloy VAT will be issued by the seller's customers, non-futures company members to the buyer's customers, and non-futures company members; within the second delivery date, the buyer's member shall provide the seller's member with specific information required for issuing the special invoice for VAT; the seller's member shall submit the special invoice for VAT to the buyer's member at the latest on the seventh working day after the last trading day; the members of both parties shall be responsible for mediating and handling related disputes.
03.
How to set the validity period of the futures warehouse receipt for casting aluminum alloy?
If the cast aluminum alloy is in a high humidity storage environment, mold spots will occur on the surface. Although it will not affect actual use, it may affect the downstream acceptance intention due to poor surface appearance.
In order to reduce the appearance quality problems such as mold spots in the circulation and storage links of cast aluminum alloys, we have stipulated the validity period of the standard warehouse receipts of cast aluminum alloy warehouses based on extensive soliciting spot market opinions. That is, the validity period of the cast aluminum alloy futures warehouse receipt is within 360 days from the earliest production date, and the standard warehouse receipt should be entered into the delivery warehouse within 180 days from the earliest production date of the batch of products before a standard warehouse receipt can be made; the production date of the cast aluminum alloy that constitutes each standard warehouse receipt shall not exceed 60 consecutive days, and the earliest date shall be used as the production date of the standard warehouse receipt.
04.
How to prevent risks from the Shanghai Futures Exchange to ensure the smooth operation of cast aluminum alloy futures and options?
The Shanghai Futures Exchange conscientiously implemented the requirements of strengthening supervision, preventing risks, and promoting high-quality development, adhered to “early identification, early warning, early exposure, and early disposal”, carefully analyzed the possible risk points in transactions, settlement, delivery, monitoring, technology and other links, widely solicited opinions and suggestions from all parties in the market, and scientifically formulated targeted risk prevention measures to ensure the smooth listing and stable operation of cast aluminum alloy futures.
First, set contract rules scientifically.Based on full research and demonstration, the Shanghai Futures Exchange has scientifically set up rules such as cast aluminum alloy trading margin, daily limit, and position limit, which not only promotes the function of futures products, but also pays attention to risk prevention. At the same time, we will carefully carry out system function development, testing and other related work around variety contract design.
The second is to ensure delivery resources.Select the AD12.1 grade of the national standard (GB/T 8733-2016) 383Y.3 and the daily standard (JIS H 2118:2006) as the delivery target for cast aluminum alloy, clarify the quality standards such as lead content, pinhole degree, slag inclusion, fracture structure, etc., and make detailed provisions and standardization of the elements covered by labels, packaging belt requirements, and quality warranty documents; at the same time, the brand registration system for delivery goods is implemented, and a delivery warehouse is set up in the main consumption places and logistics distribution centers of cast aluminum alloys to effectively prevent delivery risks.
Third, continue to carry out market training and investor education work,Focusing on the design of business rules for cast aluminum alloy futures and options, starting from improving the risk management tool of the world's largest non-ferrous metal aluminum industry chain, we will talk about the functions and characteristics of my country's first recycled metal futures and options varieties. Based on more than 10 special trainings and rule demonstration meetings in the early stage, we will launch a national key regional training plan. Based on the training goal of “letting enough rules and explaining thorough risks”, we will carry out training and investment education services for industrial chain enterprises, delivery warehouses, futures companies and other participants in industrial clusters such as the Yangtze River Delta (Ningbo, Shanghai), Pearl River Delta (Foshan), Sichuan and Chongqing (Chongqing). At the same time, a series of training courses such as online contract interpretation and trading business explanation are carried out to further enrich communication channels, enhance the coverage and acceptance of training and investment education work, and continuously improve the quality and efficiency of related work.
Fourth, continue to strengthen supervision and risk prevention,Our institute will further strictly supervise futures trading behaviors, crack down on illegal and irregular behaviors in the futures market, strengthen tracking, monitoring and pre-research predictions, continue to strengthen risk prevention in the futures market, and effectively maintain market operation order.
In the next step, the Shanghai Futures Exchange will continue to increase market cultivation efforts, strengthen market research, closely combine market demand, and jointly promote the performance of cast aluminum alloy futures and options functions with all parties, and continuously improve the futures market's ability to serve the high-quality development of the aluminum industry.