The Shanghai Futures Exchange and LME jointly launch the Shanghai hot-rolled coil contract, taking another step towards international pricing权.

⑴ The London Metal Exchange has announced that the LME Shanghai Hot Rolled Coil contract, based on the SHFE hot rolled coil futures settlement price, will officially begin trading on October 27, 2026. The contract will adopt a cash settlement method, with the delivery price converted from the SHFE RMB settlement price to US dollars as the benchmark. ⑵ According to the SHFE, this authorization marks an important breakthrough in risk management tools for both domestic and international steel trade. It will provide both Chinese and overseas companies involved in international hot rolled coil trade with a more direct and effective price reference and hedging channel, while also promoting a closer connection between Chinese steel prices and the global market. ⑶ The LME pointed out that the new contract will offer overseas participants a convenient channel, enabling them to use a globally recognized steel benchmark price. The SHFE hot rolled coil futures has an average daily trading volume nearing 700,000 contracts, with extremely tight bid-ask spreads and both sides having depth of several hundred lots, making it one of the most successful global commodity futures contracts. ⑷ Since its launch in 2014, the SHFE hot rolled coil futures has grown into the world’s largest sheet futures contract and has gradually become an important pricing reference for Chinese sheet imports in regions such as the Asia-Pacific, Middle East, North Africa, and South America. The cooperation with the LME this time marks a further extension of Shanghai’s pricing influence in the global metal pricing system.