Rule changes aim to curb speculation in commodities market
The most-traded thermal coal futures contract on the Zhengzhou Commodity Exchange fell by the daily limit on Tuesday, dropping 33.6 yuan ($4.97) per ton to 637 yuan per ton, after China's three commodity exchanges hiked transaction fees on a number of commodity contracts after midday.?
The Zhengzhou Commodity Exchange, one of China's three futures exchanges, said on Tuesday it will raise the transaction fee on thermal coal futures, according to a statement on the exchange's website.
The exchange said it will charge 30 yuan per lot if a client's daily transactions exceed 8,000 lots and it has sold 2,000 lots within the day's trading. A lot in thermal coal futures is 200 tons. The fee was 4 yuan per lot on October 24.
Transaction fees for glass and methanol were also increased, and the per-lot fee for intraday trade over methanol was three times of that of non-intraday trade.
Two other exchanges also changed the rules for other commodity contracts.
The Shanghai Futures Exchange raised transaction fees for steel rebar and rubber futures, and the Dalian Commodity Exchange increased the margin requirements for coking coal and coke futures to 11 percent. It also raised the cap on daily fluctuations to 9 percent.
The market responded to the rule change by sending the Zhengzhou exchange's most-traded thermal coal contract, which expires in January 2017, down 5 percent.
Meanwhile, the futures contracts for the steel rebar, iron ore and coke saw their earlier gains diminish, according to a report on the financial news portal yicai.com on Tuesday.
"The purpose of increasing the transaction fees is to curb speculation in the commodities market," said Jiang Haihui, a senior analyst at Shanghai-based SHZQ Futures.
The National Development and Reform Commission (NDRC), the country's top economic planner, has been pushing coal producers and power plants to sign 2017 supply contracts as winter is approaching.
The agency has said there is no basis for recent increases in domestic coal prices to be sustained, and warned that prices might even drop after sporadic factors fade away.
The NDRC hopes to ensure ample supply for downstream coal-fired plants, Jiang noted.