The Shanghai Futures Exchange answers reporters' questions regarding the internationalization of nickel futures and options.

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The Shanghai Futures Exchange (hereinafter referred to as the SHFE) will officially introduce foreign traders to participate in nickel futures and options trading on April 22 (during the continuous trading session on the evening of April 21), with the above two products opening simultaneously to Qualified Foreign Institutional Investors (QFI).

To ensure a smooth launch and robust operation of the products, on March 20, the SHFE released an announcement regarding the introduction of foreign traders for the above-mentioned products and relevant business rules. Relevant personnel accepted media interviews on hot issues of concern to the market.

• Why is the SHFE launching international business for nickel futures and options?

The internationalization of nickel futures and options is an important measure taken by the SHFE to align with the global development trend of the nickel industry and serve the development of the real economy, mainly based on the following two considerations:

First, nickel has evolved from a traditional industrial raw material to a key strategic metal in new energy and high-end manufacturing sectors. Currently, the global nickel market is accelerating its evolution in mineral resources, production, and consumption. Asia has become a key hub in the global supply chain, and its application areas have expanded from the traditional “stainless steel main engine” to the high-growth sector of new energy vehicles. Demand is also continuously increasing in high-end equipment manufacturing fields such as aerospace, industrial robots, precision manufacturing, and marine engineering. As companies deeply integrate into the global market and the application scenarios for nickel continue to diversify, the risk management needs of enterprises related to the nickel industry have significantly increased, with real economy enterprises generally calling for the SHFE to accelerate the pace of internationalization for nickel futures and options.

Second, to provide risk management tools for global nickel industry chain enterprises and enhance China’s influence on the prices of important bulk commodities. Since the listing of Shanghai nickel futures in 2015, it has maintained a high correlation with domestic spot prices and has become an important tool for pricing and risk management in domestic nickel industry trade. After the internationalization of nickel futures and options, with the introduction of foreign investors, the market structure will be further enriched, making prices reflect not only domestic supply and demand but also the expectations and judgments of global investors. At the same time, the improvement of market depth and liquidity will help promote healthy interaction between domestic and foreign prices, provide a more stable trading environment for industrial customers, lower hedging costs, and also provide price risk tools for global nickel industry chain enterprises, including China’s overseas nickel companies, to support the stable operation of the industry chain.

2. What are the highlights and key points of the rules and systems for introducing foreign traders to nickel futures and options?

The SHFE actively explores a futures business model with Chinese characteristics, draws on international practices, strengthens product series management, promotes long-term market development, and has successfully completed rule revisions and technical preparations for the internationalization of the SHFE platform in a prudent and orderly manner.

First, in terms of participants, “foreign special participants, foreign intermediary institutions, and foreign customers” have been added, clearly stating that they can participate as market participants in nickel futures and options trading.

Second, in terms of appropriateness, nickel futures and options adopt mutual recognition of appropriateness. For example, traders who have opened or established trading permissions or trading codes for specific products at other domestic futures exchanges can be exempt from knowledge testing, applicable funds, and trading experience requirements; professional investors who meet the requirements of the “Securities and Futures Investor Appropriateness Management Measures” can also be exempt from knowledge testing, applicable funds, and trading experience requirements.

Third, regarding position exit, a system arrangement for the transfer of nickel futures contracts in the delivery month has been added. Since Shanghai nickel futures are taxable delivery products, foreign institutions cannot deliver or accept special VAT invoices, and thus cannot directly participate in physical delivery. The SHFE provides a feasible path for foreign participants to indirectly participate in delivery: foreign unit customers or foreign special non-broker participants can apply for a transfer of positions to a domestic institution that has declared actual control relationships, with physical delivery completed by domestic general unit customers or non-futures company members qualified for delivery.

Fourth, in terms of risk control systems, specific regulations have been added regarding position limits, position multiples, and forced liquidation for foreign participants.

Fifth, in the settlement phase, Shanghai nickel futures trading is denominated and settled in RMB, while foreign traders and foreign brokerage institutions can also use USD as margin in addition to RMB, but USD margin can only be used for settlement after currency conversion.

3. How will the SHFE ensure risk prevention and ensure the smooth operation of nickel futures and options?

The SHFE is seriously implementing the requirements for risk prevention, strong supervision, and promoting high-quality development, taking measures from aspects such as rule systems, delivery resources, foreign intermediary institution filing, and market promotion and cultivation to ensure the smooth operation of the internationalization of nickel futures and options.

First, improve institutional guarantees. The SHFE will release general international business rules on July 8, 2025, and the international version of nickel business rules and supporting business guidelines on March 20, 2026, providing clear and standardized institutional guarantees for foreign participants.

Second, continuously optimize contract rules to ensure adequate deliverable resources. The SHFE will revise the nickel futures contract in 2025 to keep pace with the international market. Regarding deliverable resources, as of 2025, there are 14 registered brands for nickel futures, providing solid guarantees for delivery.

Third, systematically promote market cultivation, promotion, and foreign intermediary filing work. Centered on the “Strong Source Helping Enterprises” brand building, promote the integration of industry and finance, conduct online and offline training in collaboration with industry associations, and hold international training activities for nickel futures and options in key areas with futures company members and foreign intermediaries. In addition, the SHFE is also actively promoting the filing of foreign intermediary institutions, and several foreign intermediary institutions have already filed with the SHFE.

Fourth, steadily advance technical system construction and risk prevention, and ensure the smooth operation of all listing tasks. Based on the completion of system function development, multiple rounds of testing and verification will be strictly conducted, promoting technical system transformation and joint debugging tests, completing option contract listing parameters, technical system, and other tasks according to contract rules. Before the official launch, a market-wide production drill will be organized to ensure the smooth operation of the market.

Next, the SHFE will strictly implement the requirements for risk prevention, strong supervision, and promoting high-quality development, actively and prudently carry out operational and maintenance work before and after the internationalization of nickel futures and options, strengthen tracking monitoring and pre-research and judgment, maintain the smooth operation of the market, and collaboratively promote the functioning of futures and options; at the same time, it will continue to carry out market promotion, seminars, training, and investor education activities jointly with member units to attract various domestic and foreign participants to actively participate, continuously advance the internationalization process of the futures market, and strive unremittingly to build a “world-class exchange.”

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Editor: Li Tiemin