Dalian Commodity Exchange (DCE) released a notice on August 20 to revise relevant warehouse receipt management methods and add the factory warehouse delivery mechanism for the blockboard product from the 1508 contract.
The “Amendments to ‘the Management Methods of Dalian Commodity Exchange for Standard Warehouse Receipts of Soybean Meal, Soybean Oil, Palm Oil, Coke, Coking Coal, Iron Ore, Egg, and Blockboard’” (the “Amendments” for short) released yesterday require that the blockboard factory warehouse should guarantee that their futures’ quality should conform to the delivery standard and deliver the goods within 7 days (the issuing day not included) after the “Goods Delivery Notice” is issued. When the goods are discharged from the warehouse, the factory warehouse should conduct sampling under the supervision of the goods owner and the samples should be sealed up for safekeeping after the confirmation of both sides. The factory warehouse should keep the blockboard samples till 30 natural days after the delivery date, which will be regarded as the basis to settle possible quality dispute.
The goods owner should take delivery of the goods within 7 days (the issuing day included) after the “Goods Delivery Notice” is issued. If the goods owner takes delivery of the goods within 7 to 22 days (the issuing day included) after the “Goods Delivery Notice” is issued, he/she should pay overdue fines to the factory warehouse. And if the goods are not taken delivery of 22 days afterwards, the factory warehouse will handle the “Goods Delivery Notice” as that for spot goods.
For the convenience of the spot goods demand of the delivery enterprises after receiving the goods, the “Amendments” require that if the goods owner raises a claim on the veneer after the standard warehouse receipt was canceled, the factory warehouse capable of veneer processing is obligated to offer required veneered blockboard and the processing cost should be determined through the negotiation of the factory warehouse and the goods owner. The “Amendments” also specify the settlement of quality dispute of the goods delivered from the factory.
Before the listing of blockboard futures, the domestic spot goods market of blockboard was out of order and presented the problems of small enterprise scale, diversified product quality, and low quality against high standards. Meanwhile, the blockboard of the spot goods market was basically distributed layer by layer by the traders, thus leading to the huge social inventory. Therefore, the warehouse delivery mechanism is adopted at the beginning of the listing of blockboard futures.
Since the listing of blockboard futures on December 6 last year, spot enterprises have actively participated in it; the blockboard industry has presented positive changes under the futures market’s strengthening and guidance toward the national standards; and the number of enterprises adjusting their manufacturing technology and manufacturing according to the national standards has increased. At the same time, since the end of last year, the melamine decorative laminate appeared in the market and its ratio in circulation has gradually increased, leading to such changes of regional leading enterprises’ integrating surrounding small factories, the make-to-order manufacturing, and the flat trade structure in the blockboard spot market. During this process, some leading enterprises have gradually possessed the basic conditions of becoming a factory warehouse, which has paved the road for introducing factory warehouse delivery for the blockboard product.
Market participants believed that adding the factory warehouse delivery for blockboard product is the result of the blockboard futures market’s guidance and promotion toward industry upgrading and also the requirement of its adapting to and serving the development changes of the blockboard’s industry pattern. The implementation of factory warehouse delivery will further effectively reduce the delivery cost, accelerate the speed of warehouse receipt forming, help to attract and promote spot enterprises to participate in the futures market, and further enhance the operation quality and industrial service capacity of the blockboard product.
The factory warehouse delivery is a kind of delivery mechanism initially created by DCE for the soybean meal product in 2004 and has been well received by spot enterprises due to its features of low delivery cost, convenient warehouse receipt forming, and better satisfying the buyer’s individualized needs. And it has been widely used in the delivery mechanism design of other futures products afterwards.
