ZHONGZHOU FUTURES

the terms, as they are often used interchangedly. There is no regulated futures broker by the name of "Zhongzhou Futures". Rather, the name is often familiar to people through its association with Zhengzhou (where the Zhengzhou Commodity Exchange is located), one of China’s leading futures exchanges. The Zhengzhou Commodity Exchange has a history, products, a trading structure, and a regulatory framework, which will be discussed in this document.

In 1990, Zhengzhou Commodity Exchange became the first pilot futures exchange in China, having developed out of an agricultural futures research project started in 1988. The exchange started with wheat, corn and soybean contracts before expanding to include a range of major products (e.g., white sugar in 2006, early indica rice in 2009) and eventually options, industrial derivatives and chemical derivatives. All commodities available for trading on the ZCE are denominated in RMB.

The Zhengzhou Commodity Exchange offers contract products and options on agricultural and chemical commodities, all of which trade on an electronic trading platform during both day and night sessions. Contract specifications and daily price limits, as well as regulations concerning margin levels, are standardised across all contracts traded on the ZCE.

Contract Specifications

Contract Contract Size Daily Price Limit Margin Requirement

Wheat 10 tons ±6% to ±8% 5%–15%

White Sugar 10 tons ±6% to ±8% 5%–15%

PTA (Purified Terephthalic Acid) 5 tons ±6% to ±8% 5%–15%

Cotton 5 tons ±6% to ±8% 5%–15%

Methanol 10 tons ±6% to ±8% 5%–15%

Regulatory Status

Entity Regulator License Type Status

Zhengzhou Commodity Exchange (ZCE) China Securities Regulatory Commission (CSRC) Registered Futures Exchange Full Regulation, National Level Exchange

Trading Conditions

Feature Description

Hours Trading Day session: 9:00 am to 10:15 am, 10:30 am to 11:30 am, and 1:30 pm to 3:00 pm CST; night session: 9:00 am to 11:00 am CST for some contracts.

Order Forms Market, Limit, Stop.

Margin Minimum Margin: 5% to 15%, depending on contract product and volatility

Leverage Approximately 7x - 20x using margin.

Settlement Daily settled to market as well as physical delivery.

Fee Structure (Typical Exchange Fee Revenue in the Year 2024)

Fee Type Range (RMB) Notes

Opening Fee 2 - 10 Varies depending on contract product

Closing Fee 2 - 10 May be higher for Day Trades

Options Fees 1 - 5 Per contract

Delivery Fees Range Storage, Inspection, Logistics

Special Notes:

Traders cannot directly access the ZCE. A trader would participate in the ZCE market through licensed Commercial Futures Brokers, using CTP or commercial-specific applications to access.

The ZCE is considered to be one of the most liquid markets for agricultural and chemical contracts, including but not limited to white sugar, PTA, and cotton.

Access for foreign retail traders still remains limited, while participation from within China continues to grow.

In recent years, more options and an expanded product line along with advanced electronic trading infrastructure have been developed.

Conclusion

Zhongzhou Futures is not a regulated broker, but a term often associated with the Zhengzhou Commodity Exchange, a key institution in China's commodity futures market. The ZCE has a long established and regulatory framework. For traders who wish to trade in chinese agricultural and chemical commodity markets, the ZCE is a critical resource through the use of licensed futures brokers.