Shanghai Futures Exchange halts duty-free metal delivery settlement
In short
The Shanghai Futures Exchange has stopped settling copper and aluminum futures with deliveries from duty-free warehouses. The reported summary says that system had long helped traders avoid taxes on metal sold overseas.
This could affect how Chinese metal traders handle futures and delivery. The report does not say how long the suspension will last or whether more metals are covered.
What the reporting says
The Shanghai Futures Exchange has suspended settlement of copper and aluminum futures with deliveries from duty-free warehouses, according to a publisher summary. The reported reason is that the mechanism had long helped Chinese traders avoid taxes on metal that can be sold overseas. The immediate consequence is a change in how some futures deliveries are settled, but the reporting does not state how long the suspension will last.
Why it matters
The Shanghai Futures Exchange has suspended settlement of copper and aluminum futures that use deliveries from duty-free warehouses. The summary says this channel had long allowed Chinese traders to avoid taxes on metal sold overseas. The move could affect trading and delivery practices in base metals. What is not stated is how broad the change is beyond copper and aluminum or how long it will remain in place.