On 23 August 2019, Qianhai Mercantile Exchange (QME) officially launched spot copper rod, the 4^th spot product following the debut of alumina, aluminium billets and aluminium rods. 

On the first trading day, five industrial customers and physical traders including Changzhou Yuanmei, Jiajia Supply Chain, Shanghai Yuqixiang, Guangdong Zhongqiyuan and Shenzhen Zongheng completed the first batch of transactions on the QME platform with a transaction volume of 641.86 tonnes and a transaction amount RMB 29,936,900, producing/generating the very first spot benchmark price of QME copper rods based on real/genuine transactions in Jiangsu.  Going forward, the regional price of QME copper rods will gradually cover the major areas with high copper rod consumption, in the hope that such prices could become major index figures for setting the spot price of copper rods applicable in the whole country.

Copper rod, also known as copper wire rod for electrical purpose, is the raw material for producing wires and cables.  The main raw material of copper rods is cathode copper (also called copper cathode), which is divided into oxygen-free and low-oxygen according to the different production processes.  The specifications of copper rods are 6mm, 8mm, 10mm, 12mm, etc., the prevailing ones on the market being of 8mm.  In 2018, the Mainland’s total copper consumption reached 14.623 million tonnes, of which 7.38 million tonnes, or 50%, were copper rods, making it the most important copper processing product in the copper industry chain.

The spot copper rods launched by QME this time are of T1-grade of the national standard "GB/T 3952-2016" and have a diameter of 8mm.  The places of delivery include Jiangsu and Guangdong which basically cover the major areas in Mainland China with high copper rod consumption.  QME will continue to diversify product types to cater to market and customers’ needs while progressively expanding the scope of delivery to cover more production bases.

At present, QME adopts the spot quotation and trading model whereby a participant publishes and quotes information like the price and quantity of the products intended to be sold or purchased through QME’s e-trading system and enters into an electronic transaction contract with a qualified counterparty which accepts the offer and takes up the products after the transaction in accordance with the principle of “first-come-first-served” and then completes the settlement with the QME warehouse warrant or by way of offline settlement.  The trading hours are 09:00 to 15:30 from Monday to Friday (except for national holidays and non-trading days as announced by QME). 

The copper rods launched this time are divided into standard and non-standard ones, of which the standard ones adopt the “online trading, online settlement & online delivery as per rules” model whereas the non-standard ones adopt the “online trading, online settlement & offline delivery as per rules” model which resembles the operation practices of [physical] enterprises and better accommodates the customers’ needs for spot trading and delivery.

QME is a commodity spot trading platform established by the HKEX Group in Qianhai, Shenzhen.  By leveraging the credibility and market’s recognition of HKEX, it hopes to provide enterprises with modern supply chain infrastructure and services such as warehousing, delivery and settlement, thereby forming benchmark spot prices that can reflect the supply and demand fundamentals of the physical enterprises and further regulate the spot trading market for Mainland Chinese commodities, in turn supporting the development of the real economy.