The London Metal Exchange (LME) has signed a landmark agreement with the Shanghai Futures Exchange (SHFE) to list a new cash-settled futures contract giving international market participants direct exposure to China’s flat steel market for the first time.
The new instrument, LME Steel HRC Shanghai, will be cash-settled against the SHFE’s Steel Hot-Rolled Coil (HRC) monthly US dollar price. Currency conversions and pricing calculations will be handled by Commodity Pricing and Analysis Limited (CPAL), a sister company of the LME. Trading is expected to begin in October 2026, subject to final regulatory non-objection.
The deal is a significant step in bridging East-West commodity markets. China is by far the world’s largest producer and consumer of steel, and the SHFE’s HRC contract is one of the most liquid commodity futures in existence. Until now, access for non-Chinese entities has been structurally limited.
LME Chairman John Williamson said the contract would 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,” while also deepening the exchange’s ties with Chinese metal markets.
SHFE Chairman Tian Xiangyang highlighted the move’s broader significance, noting it would “further attract global steel enterprises and financial institutions to participate in price formation” and enhance the international profile of China’s steel futures ecosystem.
The new contract adds to the LME’s growing suite of cash-settled steel products and marks one of the most concrete steps yet toward integrating Chinese commodity benchmarks into global capital markets infrastructure.
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