Shanghai releases action plan to strengthen linkages between futures and spot markets for nonferrous metals

On Jan. 20, multiple municipal departments in Shanghai jointly released the Action Plan on Strengthening Futures–Spot Linkages and Enhancing the Competitiveness of the Nonferrous Metals Commodity Market (hereinafter referred to as the Action Plan).

Leveraging its unique advantages, Shanghai has already developed an integrated market framework for nonferrous metals that links futures, spot and over-the-counter (OTC) derivatives markets. Through 18 measures across three key areas, the Action Plan aims to further enhance market capacity by promoting market connectivity and advancing coordinated development among futures, spot and derivatives markets; raising the level of internationalization to increase the global influence of “Shanghai prices”; and attracting market participants to cultivate a robust market ecosystem.

“The three priorities—futures–spot linkage, internationalization and ecosystem development—are not isolated,” said Fu Xiaoyan, senior director at Nanhua Futures Research Institute. “They form a mutually reinforcing system that drives a virtuous cycle, jointly serving the two core objectives of improving resource allocation efficiency and strengthening pricing influence.”

Fu further explained that futures–spot linkage serves as the foundation and core of the initiative, connecting futures, spot and OTC markets so that futures prices more accurately reflect real supply and demand, while providing international investors with reliable price signals and hedging tools. Enhancing internationalization acts as a key lever, enabling wider global recognition and use of “Shanghai prices.” Ecosystem development, meanwhile, provides systemic support by attracting and retaining leading enterprises along the global industrial chain, financial institutions and professional service providers, thereby forming a self-reinforcing cycle.

Wang Jun, chief expert at Gelin Dahua Futures, said the release of the Action Plan marks Shanghai’s transition from planning to coordinated implementation in its efforts to build a global regional pricing center for nonferrous metals.

Fu added that the timing of the Action Plan aligns closely with national strategies. On the one hand, it leverages financial opening-up and commodity supply stabilization to support the development of the domestic and international dual-circulation framework; on the other, it seizes market opportunities to provide tailored financial instruments for China’s competitive new energy sector, further strengthening resource security.

Looking ahead, continued policy support is expected to safeguard market development. Xu Yi, a researcher at Haitong Futures Research Institute, suggested further efforts in three areas: first, expanding the range of derivatives to meet diversified risk management needs; second, piloting foreign exchange management innovations in free trade zones to attract resource suppliers from Belt and Road partner countries to jointly develop warehousing and delivery hubs, helping establish “Shanghai prices” as trade benchmarks; and third, collaborating with universities to establish specialized programs in commodity finance, encouraging internationally oriented research and cultivating more multidisciplinary professionals.