The China Securities Regulatory Commission has recently given the green light for the Shanghai Futures Exchange (SHFE, including its subsidiary Shanghai International Energy Exchange) to list options on hot-rolled coil, stainless steel, and low-sulfur fuel oil. On August 20, 2026, a representative from the exchange addressed media inquiries regarding the upcoming launch of these three new derivatives.
Rationale Behind the New Offerings
China stands as the world's largest consumer of hot-rolled coil and stainless steel, while also serving as a key market for low-sulfur fuel oil consumption and bunkering in the Asia-Pacific region. Companies across these industrial chains are deeply integrated into global markets, creating an urgent need for more refined and diversified risk management instruments. To broaden the commodity risk management toolkit, support the high-quality development of industrial enterprises, and attract greater participation from both domestic and international investors, the exchange is introducing these options. This move represents a significant step in expanding and upgrading the exchange's options business while deepening its commitment to serving the real economy. Since the debut of copper options in 2018, this addition will bring the total number of listed options to 23, spanning core sectors such as non-ferrous metals, precious metals, ferrous metals, and energy chemicals. This milestone signals the near-completion of the exchange's integrated "futures plus options" product system, offering industrial clients a diverse array of hedging strategies.
Scheduled Listing Timeline
The hot-rolled coil, stainless steel, and low-sulfur fuel oil options are slated to begin trading at 9:00 AM on September 10, 2026. The hot-rolled coil and stainless steel options will be listed on the SHFE, while the low-sulfur fuel oil option will trade on the Shanghai International Energy Exchange (INE), a subsidiary of the SHFE. As a domestic specific variety, the low-sulfur fuel oil option will directly welcome overseas traders, and all three options will be open to Qualified Foreign Investors (QFIs) from their launch date.
Key Contract Specifications
In designing these three option contracts, the exchange drew upon the successful experience of existing products while carefully considering the unique characteristics of each underlying asset. The focus has been on risk prevention and market development to ensure transparency, fairness, and sustainable growth of the options market. For instance, the minimum price fluctuation for the low-sulfur fuel oil option is set at 0.5 yuan per ton, maintaining a 1:2 ratio with the underlying futures contract, consistent with the structure used for fuel oil and crude oil options. Regarding contract months, the design follows a model where the two nearest consecutive months are listed, with subsequent months added on the second trading day after the underlying futures contract reaches a specified open interest threshold, details of which will be announced separately by the exchange. This approach ensures that options are listed for futures contracts with significant industrial demand, optimizing the functionality of the options while avoiding excessive contract listings that could fragment market liquidity.
Ensuring Smooth and Stable Operation
Beyond the scientific design of core rules covering option contracts, exercise procedures, position limits, and price limits, the exchange is focused on aligning these options with their corresponding futures products and standardizing trading, clearing, and risk control processes. Market education and investor training are also priorities, with training sessions planned in Shanghai and other regions to help companies familiarize themselves with and participate in the options market. The exchange will publish detailed business guidelines to support corporate participation. Additionally, futures company members are being reinforced as the first line of defense in risk management, with strict requirements to conduct proper investor suitability assessments and guide investors toward rational participation. In the lead-up to the launch, the exchange will complete the necessary listing parameter configurations and technical system preparations, followed by simulation testing and full-market production drills to guarantee a seamless introduction and stable operation of all three options.