LME to launch contract in October using Shanghai Futures Exchange steel price (updated)

Hong Kong Exchanges and Clearing

17/06/2026 13:17

Recasts with new quotes, data and details
By Eric Onstad

    LONDON, June 17 (Reuters) - The London Metal Exchange agreed a groundbreaking deal with its Shanghai counterpart on Wednesday to use Chinese steel futures prices in a new LME contract, moving forward China's agenda to boost influence in commodity pricing.   
The LME hopes to boost its volumes and attract new customers by mirroring one of the world's most liquid steel contracts from the Shanghai Futures Exchange. 

CONTRACT LAUNCH DUE IN OCTOBER
The LME, the world's oldest and largest market for industrial metals, and SHFE said in a joint statement that trading of the contract based on the Shanghai hot-rolled coil futures was due to begin in October.
“It makes sense from the price discovery aspect, but it will need liquidity,” a steel trader told Reuters.
“The LME has to protect its place as the price discovery centre and the go-to market for metals.”
The Chinese government has put pressure on Chinese exchanges to innovate and expand their influence to accelerate its goal of domestic players having more control over global commodity prices.
"This cooperation will further attract global steel enterprises and financial institutions to participate in price formation, and continuously enhance the international influence of China's steel futures products,” said SHFE Chairman Tian Xiangyang.
The SHFE HRC contract had 169 million lots of volume in 2025, equivalent to 1.69 billion metric tons, while the LME's Chinese HRC futures only had 139,109 lots. 
The new LME/SHFE contract had its genesis in an announcement in October 2023, when the LME said it agreed to work with SHFE on product development. 
"It will give companies outside China easier access to one of the world’s most liquid commodity contracts alongside the simplicity of trading a cash-settled LME contract," LME Chairman John Williamson said.
Currency conversions and other pricing tasks for the new contract will be undertaken by a company in Dubai established last October by the LME and its parent Hong Kong Exchanges and Clearing Ltd. 0388.HK.
At the time, the LME said the Dubai entity - Commodity Pricing and Analysis Limited - was linked with its plans to launch a new mechanism to establish how much of a premium customers are willing to pay for metals produced with lower carbon.

 (Reporting by Eric Onstad. Additional reporting by Pratima Desai. Editing by Alison Williams, Louise Heavens and Mark Potter)
 ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))