SHFE launches energy trading centre in free-trade zone
SHANGHAI Nov 22 (Reuters) - The Shanghai Futures Exchange (SHFE) on Friday launched a new energy trading unit in the city's pilot free-trade zone, allowing the bourse to speed up preparatory work for its long-awaited crude oil futures contract.
By setting up a new trading centre in the free-trade zone, where the Chinese government has promised fewer investment restrictions and greater ability to convert yuan, the exchange will be able to draw foreign investors and get around currency restrictions currently limiting all of China's commodity exchanges.
The Shanghai International Energy Trade Center was launched with registered capital of 5 billion yuan ($820.59 million), making it the largest company set up in the free-trade zone, the SHFE said on Friday.
Officials at the exchange did not reveal details on the proposed crude oil contract, but SHFE chairman Yang Maijun said on Thursday that the contract may be priced in yuan and use the medium sour crude grade as its benchmark.
The SHFE said it was also considering launch other products, such as liquefied petroleum gas and natural gas in the future.
The exchange has prepared for years to launch a new crude contract, aiming to create a benchmark for Asia as China's vociferous energy demand has catapulted the country to become the world's net oil importer in September.
Currently, much of the world's crude supply is priced against the futures contracts based on North Sea Brent crude and West Texas Intermediate crude.
($1 = 6.0932 Chinese yuan)
(Reporting by Judy HuaFayen Wong)
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