On October 23, in an interview, He Jun, the Deputy General Manager of the Shanghai Futures Exchange, highlighted the impressive trading volume and activity of the shipping index at the exchange, which greatly surpasses other markets. He noted that from January to September of this year, the trading volume reached 6.3 times that of over 200 contracts from four other overseas futures exchanges.
The occasion was the 2024 North Bund International Shipping Forum and Financial and Insurance Forum held in Shanghai. During the conference, He emphasized the achievements of China’s first shipping futures product, the Euroline Container Index futures, which has yielded significant results in its first year of trading.
China, being a major shipping nation, completes over 90% of its import and export trade by sea. Since 2002, China’s port container throughput has remained the highest in the world for over two decades. However, He pointed out that there is considerable room for improvement in China’s shipping services, particularly in shipping finance. On August 18, 2023, the Shanghai Futures Exchange collaborated with the Shanghai Shipping Exchange to launch the Euroline Container Index futures, based on the shipping rate index published by the latter, filling a significant gap in China’s shipping derivatives market.
Since its introduction, the shipping index futures market has seen robust trading activity. As of October 22 this year, the cumulative trading volume reached 42.44 million contracts, with a total trading value of 3.48 trillion yuan (approximately $482 billion), and an average daily trading value of 12.3 billion yuan. The end-of-period open interest stood at 70,000 contracts, with an average daily open interest of 80,000 contracts.
Furthermore, the shipping index futures have been tested with significant market events, including the unforeseen incident in the Red Sea at the end of 2023 and the continuous price increases in the spot market from March to June 2024. Despite spot and futures prices soaring fivefold within a year and exhibiting three times the volatility of typical commodities, the index has effectively mitigated extreme market risks.
Looking ahead, He Jun affirmed that the Shanghai Futures Exchange will prioritize risk prevention, diligently fulfill its market oversight and risk management responsibilities, and work to maintain the stable operation of the shipping index futures market. The exchange also aims to establish several financial service hubs covering national container shipping industry clusters, innovate a range of price risk management products, and attract new shipping industry clients to participate in trading.
