Copper plays a critical role in the global industrial ecosystem, serving as a foundational material for power generation, infrastructure, electronics, and energy transition technologies. Within Asia, Shanghai Futures Exchange (SHFE) Copper stands out as one of the most closely watched and actively traded copper benchmarks, reflecting onshore Chinese supply-demand dynamics and domestic pricing conditions.
Listed on the SHFE, Copper Futures and Options provide market participants with direct exposure to China’s domestic copper market, reflecting onshore supply-demand conditions and local price formation dynamics.
Why SHFE Copper Matters
China is the world’s largest consumer of refined copper, with demand driven by construction, manufacturing, power grids, electric vehicles, and renewable energy infrastructure. As a result, SHFE Copper prices often reflect local inventory conditions, policy signals, seasonal demand cycles, and downstream industrial activity within China.
Compared with offshore benchmarks, SHFE Copper can at times trade at a premium or discount, serving as a useful reference for:
- Physical market participants managing procurement and inventory risks
- Institutional traders seeking relative value or arbitrage opportunities
- Asset managers monitoring China’s industrial and macroeconomic trends
SHFE Copper Futures
SHFE Copper Futures are denominated in RMB and represent deliverable contracts linked to SHFE-approved warehouse stocks. Key characteristics include:
- Exposure to China’s onshore copper price discovery
- Strong participation from industrial hedgers and domestic institutions
- Sensitivity to China-specific factors such as inventory movements, import flows, and policy developments
For global participants, SHFE Copper Futures offer a differentiated view of copper pricing compared to offshore markets.
SHFE Copper Options
In addition to futures, SHFE Copper Options provide flexibility in managing price risk and volatility exposure. Options enable participants to:
- Hedge downside or upside risk with defined exposure
- Express volatility views around macro events or policy shifts
- Structure more tailored strategies alongside futures positions
The availability of both futures and options supports more advanced risk management and trading strategies within the onshore Chinese copper market.
Market Access via the QFI Scheme
SHFE Copper Futures and Options are available to international participants via the Qualified Foreign Investor (QFI) scheme.
Under the QFI framework, eligible global institutions can access China’s domestic futures and options markets directly, without the need for onshore entity setup. This provides:
- Regulated access to China’s onshore commodity derivatives
- Participation in domestic price discovery
- Trading of SHFE Copper Futures and Options contracts
It is important to note that SHFE Copper is not offered as an internationalised contract and is only accessible through the QFI scheme.
Conclusion
SHFE Copper represents a core component of China’s commodity derivatives landscape, offering unique insight into the world’s largest copper-consuming economy. For global institutions, access via the QFI scheme enables participation in China’s onshore copper price discovery through Futures and Options, supporting hedging, trading, and portfolio diversification objectives.
As China continues to play a central role in global industrial demand and energy transition, SHFE Copper remains a key market for participants seeking deeper engagement with onshore commodity dynamics.
Start Trading with Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker by aggregated trading volume across China’s two regulated exchanges.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us, opening additional trading avenues.
Expect streamlined processes and an easy-to-use interface designed for minimal latency, accompanied by our team’s round-the-clock availability on trading days to provide assistance for all your trading needs.
