From Reuters, October 13/14:
China is locking in steps to shape the pricing of the vast quantities of industrial metals it produces and consumes, with moves to attract foreign firms to trade on Shanghai's futures exchange, which would eventually fragment global markets.
After buying mining assets around the world over the past two decades to secure metals needed for industrialisation and more recently to meet its carbon emissions targets, China now wants a bigger say in how prices of those metals are determined.But it has lost market share in metals futures trading and needs to persuade international investors to use the Shanghai Futures Exchange (ShFE), according to interviews with more than 10 brokers, traders, analysts, risk managers and consultants with direct knowledge of ShFE's plans.If successful, the push would help give Shanghai's contracts benchmark status and upend the system for reference prices of industrial metals in place since 1877 when the London Metal Exchange (LME) started life above a hat shop in London.ShFE benchmarks would eliminate the need for Chinese firms to link their physical contracts to LME prices and create a need for foreigners to trade on ShFE to influence reference prices in their contracts, shifting market sway from the west to China.
In recent meetings, the exchange told industry players the plan is high on its agenda and was likely to be put in place soon, but it did not discuss deadlines, two people said....
