Dec 5 (Reuters) – China’s Zhengzhou commodity exchange will launch evening trading from next week for products including cotton, sugar and rapemeal, potentially increasing liquidity to the market and opening up arbitrage opportunities for traders.
The new trading hours, from 9 pm until 11.30 pm, will begin on Dec. 12, said a statement from the exchange.
The extended hours mean traders can trade for a short period while other exchanges such as New York’s Intercontinental Exchange (ICE), home to the benchmark cotton futuresmarket, are also open.
“It’s good for guys doing arbitrage. They have some overlap time with ICE,” said a trade source in China.
China, the world’s top consumer of a raft of commodities ranging from cotton to soybeans, has rolled out a series of futures contracts in recent years, aiming to establish them as benchmarks in the international market.
Zhengzhou’s move comes a few months before ICE launches five new futures contracts – including cotton and sugar – on its Singapore bourse, stepping up competition among the world’s futures exchanges.
Dalian Commodity Exchange will this week trial overnight trade in iron ore futures.
Zhengzhou’s new trading hours also apply to methyl alcohol and PTA, the key ingredient in synthetic fibre polyester. (Reporting By Dominique Patton; Editing by Gopakumar Warrier)