Shanghai Clearing House weighs carbon market involvement

Published 12:04 on July 31, 2015  /  Last updated at 12:04 on July 31, 2015  /  Bavardage, China, China's Pilot Markets  /  No Comments

The Shanghai Clearing House is considering getting involved in more commodity markets within the Shanghai Free Trade Zone, including the carbon market, it said Friday, according to the China Securities Journal.

The Shanghai Clearing House is considering getting involved in more commodity markets within the Shanghai Free Trade Zone, including the carbon market, it said Friday, according to the China Securities Journal.

The clearing house is planning to set up a multi-commodity trading platform, and is weighing including carbon markets, Li Ruiyong, the clearing house’s vice general manager, said Friday.

Shanghai Clearing House, which settles trades on the Shanghai Stock Exchange as well as for some international deals, offers RNB-denominated trades and swaps in a number of products, including freight, iron ore, thermal coal and some petrochemical products.

Li told reporters Friday the company plans to broaden its scope to develop innovative clearing for commodities and derivatives such as carbon, non-ferrous metals and energy products.

He did not mention a timeline for how soon the company could get involved, although the strategy would fit well with the priorities of the government, which has been pushing financial market participants to take an interest in China’s carbon markets as they struggle with liquidity.

Meanwhile, allowances in the Shanghai carbon market fell 9.5% on Friday to 9.50 yuan ($1.53), the second time this week it set a new record low for any of the Chinese pilot markets, but only on the back of 100 allowances traded.

By Stian Reklev – stian@carbon-pulse.com

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