China will allow foreign investors to trade domestic nickel and lithium futures, a move aimed at strengthening Beijing’s influence in global commodities markets.
Nickel and lithium carbonate are among 14 futures and options products that will be opened to overseas participation, according to a statement released on Friday by the China Securities Regulatory Commission, News.Az reports, citing Bloomberg.
The regulator said exchanges would be encouraged to prepare for implementation, though no start date was provided.
China is the world’s largest buyer of raw materials, yet global benchmark prices are largely set in financial hubs such as London, Singapore, and New York. By opening more of its futures markets to foreign investors, Beijing is seeking greater influence over international pricing. The move also aligns with China’s broader objective of increasing the appeal of the yuan as a global currency.
Nickel futures are traded on the Shanghai Futures Exchange, while lithium carbonate futures are listed on the Guangzhou Futures Exchange. Both contracts are among the most actively traded in China’s domestic commodities markets and are considered globally significant due to their critical role in battery production and the energy transition.
“It’s a significant move,” said Tiger Shi, a managing partner at brokerage BANDS Financial Ltd. It’s likely that other metals like copper, aluminum and zinc, will also become available to foreign investors due to the SHFE’s global push, he said.
The Shanghai exchange unveiled an internationalization plan last May, which included a proposal to allow overseas investors to post foreign exchange as collateral for yuan-denominated trades. Restrictions on overseas capital are an oft-cited reason for China’s failure to play more of a role in global markets.
Allowing foreign investment in futures will help boost China’s commodity pricing power, improve risk management of non-ferrous metals, and promote better nickel price discovery, SHFE said in a statement on Friday.
China’s earlier moves to open up commodities futures have had only limited results. Shanghai International Energy Exchange, a unit of SHFE, has offered yuan-denominated copper contracts to overseas investors since 2020, and crude oil contract since 2018, but neither has made much of a dent in the dominance of international bourses. The Dalian Commodity Exchange let foreigners invest in iron ore futures in 2018, a move that’s had a bit more success.
