On August 20, during the “2015 China Coal-Coke-Steel Industry Conference (CCIC)”, Dalian Commodity Exchange (DCE), Ningbo Commodity Exchange (NBCE) and Zhejiang International Business Group Wuliu Co., Ltd. (ZIB) signed agreement to launch the pilot of PVC warehouse receipts switch between the two exchanges, in a bid to better serve the spot enterprises. Zhu Congjiu, vice governor of Zhejiang Province, attended the signing ceremony.
Under the agreement, DCE and NBCE will take the lead to carry out the pilot for the switch of PVC warehouse receipts between the two exchanges through ZIB. The agreement sets detailed rules for the procedure of the warehouse receipts switch and the services of and the supervision over the delivery warehouses in the pilot, and requires that the three sides should manage the business of warehouse receipts switch in strict accordance with the relevant policies and requirements of the government as well as the existing business rules and agreements of DCE and NBCE.
At the signing ceremony, Feng said that the futures and spot markets are closely connected, and the adequate integration of the two markets forms the important foundation for giving full play to the functions of the futures market and expanding and deepening the service for the real economy. The introduction of the warehouse receipts switch business is of great significance for promoting effective linkage of futures and spot markets and better serving the development of the real economy. Meanwhile, the business of futures and spot warehouse receipts switch is an important part of DCE’s efforts in developing the OTC market. In the future, on the basis of interflow of standardized goods, DCE will consider achieving circulation of non-standardized goods in the commodity market with the credit as the basis and the logistics as the guarantee, and finally realizing the natural linkage of the futures and spot markets with the warehouse receipts as the bond.
To reduce costs for participation of spot enterprises and promote futures-spot linkage, last year DCE began to discuss with NBCE and ZIB the possibility of PVC warehouse receipts switch between the two markets. In March this year, DCE and Finance Office of Zhejiang Province signed a strategic cooperation agreement, laying the foundation for the tripartite cooperation. In early May, the three sides held the “Seminar on Futures, Spot Warehouse Receipts Switch Business” in Ningbo, further advancing the relevant work. A market participant said that the futures and spot warehouse receipts switch business jointly introduced by the futures and spot exchanges marks a new exploration in the linkage model of futures and spot markets, and will add a new highlight in the futures market serving the real economy.
