ABN AMRO Clearing has completed its first commodity futures trade in China, a crude oil futures transaction for an existing client.
Currently approved as an Overseas Intermediary Broker by the Shanghai International Energy Exchange (INE) and Dalian Commodity Exchange (DCE), the company expects to steadily expand its China service offering in support of our client demand.
Due to high trade volumes in China’s commodities market and its growing role as a price-setter, many of ABN AMRO Clearing’s existing internationally-based clients are eager to participate, particularly proprietary trading firms and corporate hedging firms. International investors, free to settle trades in USD or RMB and move capital in and out of China with greater flexibility, are planning for the country’s further market liberalisation with the expectation of wider access to more commodities products.
ABN AMRO Clearing clients with trading accounts from the company’s Singapore office are now able to book internationalised futures products, including crude oil futures on the INE and Iron Ore futures with DCE. Using the same trading account, clients who trade in other correlated products across international markets enjoy further margin offsets from ABM AMRO Clearing’s risk model.
“As one of the top clearers in every time zone globally, we ultimately want to play an active role in the financial markets’ ecosystem,” says ABN AMRO Clearing’s Asia Pacific CEO Barry Parker. “With our entry into China’s fast growing commodity market, we hope to contribute to the accessibility of China’s markets as well as provide greater transparency and liquidity for our clients.”
ABN AMRO Clearing is initiating its China coverage with two of the country’s biggest commodity futures. China’s most internationalised product, INE’s Crude Oil futures, has overseas institutional investors making up one-third of institutional trading volume and almost double of its institutional open interest. With a daily trading volume of 141,985 lots in 2019, it is the third largest Crude Oil futures after WTI and Brent. Additionally, China, as the world’s biggest consumer of iron ore and top producer of steel, already boasts the most traded Iron Ore futures globally in 2019 with more than 200 international investors trading 29.6 billion metric tons on the DCE.