Trading at the Zhengzhou Commodity Exchange (ZCE)

ZCE : History | Membership | Types Traded | Further Reading

Though at present (according to the most recently compiled lists) the Zhengzhou Commodity Exchange (ZCE) is only China’s third largest commodity exchange in terms of trading volume, the advanced nature of its electronic commodity trading system and the ZCE’s importance for the trading of China’s vast amount of agricultural commodities means that it is on the way to becoming one of the world’s most important commodity exchanges. With China’s population increasing, and its economy forecast to overtake the United States’ economy as the world’s biggest within the next thirty years, the Zhengzhou Commodity Exchange is sure to play a vital role in ensuring economic prosperity not only for China but for all modern trading nations. [wdca_ad id=”1134″ ]

History of the Zhengzhou Commodity Exchange

Though the city of Zhengzhou has a long history as a centre of trade, the Zhengzhou Commodity Exchange was only established in 1990 as part of the wide-ranging programme of economic reforms implemented in China at that time by Deng Xiao Ping. Though many commodities exchanges were founded at this time, most were closed soon after due to irregularities: indeed, after 1998 only three remained. Since the ZCE was one of those exchanges which conducted its businesses in an exemplary manner, it was thus given permission to not only continue trading but to expand its operations. It has now cemented its place in Chinese economic life and is on the way to becoming a commodity exchange with a truly global reach.

Trading on the Zhengzhou Commodity Exchange

Members of the ZCE have full access to the exchange’s electronic trading system. This system can process both commodity trading and the clearing of trades, and also the delivery of contracts and the provision of additional information relevant to trading such as market news, changes in exchange rules etc. Traders need not be present at the exchange to action trades: the Zhengzhou Commodity Exchange trading system includes the facility to trade at distance, including online commodity trading via the World Wide Web.

Commodities Traded on the Zhengzhou Commodity Exchange

Though it is a relatively new commodity exchange, the majority of the business of the Zhengzhou Commodity Exchange is in the trading of traditional agricultural commodities. Its home city’s geographical position (Zhengzhou is in east-central China and is situated on the Yellow River) and historical trading connections to many parts of China make it the ideal place for housing the institution designed to co-ordinate China’s trade in these essential commodities. However, with the addition of the non-agricultural commodity PTA (Pure Terephthalic Acid) to its list of products in late 1996, the Zhengzhou Commodity Exchange signalled its intent to move beyond its traditional areas of expertise into new commodities that are essential to China’s future growth. PTA, being one of the main precursors to the manufacture of polyester PET, is a commodity that is essential to many of China’s new industries, and so a secure, reliable supply, overseen by the ZCE, is vital for China’s future prosperity. The commodities traded on the ZCE are (contract codes/ticker symbols in brackets):

  • Cotton No. 1 (CO)
  • Early Long Grain Non-Glutinous Rice (ER)
  • Hard White Wheat (WT)
  • Pure Terephthalic Acid, abbreviated as PTA (TA)
  • Rapeseed Oil (RO)
  • Strong Gluten Wheat (WS)
  • White Sugar (SR)

Further Reading

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