Shanghai exchange presents new steel rebar delivery rules
Adds analysts comment, adjustments to price limit, margins and trading fees in paragraphs 6, 8-10
BEIJING, July 29 (Reuters) -The Shanghai Futures Exchange said it will allow steel rebar and wire rod produced under new national standards to be used to register warrants from Monday.
China, the world's largest steel producer and consumer, on June 25 announced mandatory standards which will take effect from Sept. 25 to replace voluntary guidelines that have been in place since 2018 and 2017 for rebar and wire rod, respectively.
Steel rebar and wire rod produced under old standards cannot be used to register standard warrants from Aug. 19, the bourse said in a statement on Monday.
"We will take necessary measures based on the market situation to facilitate a smooth transition to the new revised national standards," it added.
The exchange will cancel warrants for steel rebar and wire rod produced under the old standards and any standard warrants that remain pledged will be released after market close on Sept. 24, the statement showed.
"It is in line with market expectations that products with new standards will be required for delivery from the October contract," analysts at First Futures said in a note.
Regional steel trading associations in China are seeking a delay to the new quality standards for steel rebar, used in construction, until either November or next January after a panic inventory sell-off weighed on steel prices.
The bourse said in a separate statement that from the settlement on July 31, it would raise the daily price limit ratio for rebar futures to be delivered from August to October to 7%, 7% and 6%, each month respectively, from 5% previously.
Margins for hedging transactions for those contracts will be lifted to 15%, 10% and 7%, from 10%, 6% and 6%, respectively and margins for speculative trading to 15%, 10% and 8% from 10%, 7% and 7%, respectively.
It also announced an adjustment to the intra-day trading fees for rebar and wire rod contracts with delivery from August to October to 0.02% of the transaction amount from night trading on July 30.
Reporting by Amy Lv and Liz Lee; editing by Bernadette Baum and Jason Neely
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