Trade Silver Futures Offshore on Hong Kong Mercantile Exchange

The Hong Kong Mercantile Exchange (“HKMEx”), China’s international commodity marketplace, announced Monday the launch of a US-dollar silver futures contract to begin trading on 22 July, 2011, following the successful introduction of its gold futures two months ago.

The new contract, launched on the back of surging global demand for silver, will trade in units of 1,000 troy ounces and be delivered in Hong Kong. Trading will last for 15 hours every day, Monday to Friday, beginning at 8am and ending at 11pm Hong Kong time, with a 30-minute pre-opening auction starting at 7:30am. Clearing and settlement of contracts will be conducted through the independent clearing house LCH.Clearnet.

Between 2008 and 2010, demand for silver rose 67% in China and 17% globally to reach 7,495 tons and 32,870 tons respectively, according to market data compiled by HKMEx. China alone,accounted for nearly 23% of the world’s silver consumption last year, reflecting its importance as a global manufacturing powerhouse.

“The new contract will enable buyers and sellers in China to trade effectively with their counterparts across the world, while at the same time, allowing investors to gain exposure to silver price movements and broaden their investment portfolio,” said HKMEx president Albert Helmig.

“We are fully aware of the vast potential of precious metals both as a hedge against inflation and as an investment diversification tool and will continue to expand our product suite in this area” added Mr Helmig.

HKMEx’s first product, a 32 troy ounces gold futures contract with physical delivery in Hong Kong, traded in June a total of 48,321 contracts with a daily average volume of 2,297 contracts. Trading volume has increased in the 11 trading days in July to a daily average of 3,280 contracts.

The Exchange’s current membership represents 20 of the most well established financial institutions and futures brokerages in the region and globally,including the most recently added Jinrui Futures (Hong Kong) Limited and Wing Fung Futures Limited. Contracts for the new silver futures will be for the current calendar month, the next two consecutive months and any months of January, March, May, July, September and December falling within a succeeding 12-month period.

Full real-time trading statistics on the new contract will be accessible through the Bloomberg and Thomson Reuters information services by typing IXSA CT and 0#HKS:respectively.