Nan­hua Fu­tures opens sub­sidiary in Bri­tain

China Daily (USA) - - BUSINESS - By CE­CILY LIU in Lon­don ce­cily.liu@mail.chi­nadai­lyuk. com

Lead­ing Chi­nese bro­ker Nan­hua Fu­tures Co Ltd launched a Bri­tish sub­sidiary on Wednesday, aim­ing to con­nect Chi­nese metal com­pa­nies with the world’s old­est met­als trad­ing mar­ket, which is lo­cated in Lon­don.

Nan­hua has ap­plied to be­come a mem­ber of the 141-year-old Lon­don Metal Ex­change. Af­ter it be­comes a mem­ber, Nan­hua will be able to as­sist Chi­nese met­als pro­duc­ers and users to trade with their in­ter­na­tional coun­ter­parts.

Luo Xufeng, pres­i­dent of Nan­hua Fu­tures, said es­tab­lish­ing Nan­hua Fi­nan­cial UK was “a big step to­wards the global mar­ket” for the com­pany.

“Lon­don is one of the most sig­nif­i­cant fi­nan­cial cen­ters through­out the en­tire world and LME is the largest non­fer­rous metal ex­change in the world. We be­lieve Nan­hua Fi­nan­cial UK will ma­ture by work­ing closely with LME,” Luo said.

Matthew Cham­ber­lain, CEO of the LME, wel­comed the launch, not­ing Chi­nese bro­kers cre­ate an im­por­tant bridge be­tween the LME and China’s vast met­als mar­ket.

Nan­hua’s UK ex­pan­sion fol­lows sim­i­lar moves by other Chi­nese fi­nan­cial en­ter­prises. Bank of China In­ter­na­tional be­came the first Chi­nese mem­ber of the LME in 2012, fol­lowed by China Mer­chants Se­cu­ri­ties, ICBC Stan­dard Bank, GF Fi­nan­cial Mar­kets and CCBI Met­dist.

The flurry of Chi­nese par­tic­i­pa­tion in the LME co­in­cides with a push by Chi­nese met­als com­pa­nies to gain greater pric­ing power in the in­ter­na­tional in­dus­try, mean­ing they can se­cure more prof­itable prices.

Al­though China con­sumes about 40 per­cent of the world’s metal sup­plies, Chi­nese com­pa­nies, so far, have very lit­tle pric­ing power over in­ter­na­tional metal trad­ing prices, be­cause most have his­tor­i­cally traded met­als with their coun­ter­parts di­rectly rather than via com­mod­ity ex­changes.

Rec­og­niz­ing this is­sue and mo­bi­liz­ing to se­cure bet­ter prices, Chi­nese met­als pro­duc­ers and users have started to trade through bro­kers on in­ter­na­tional ex­changes, in­clud­ing the LME. This trend has at­tracted the likes of Nan­hua to es­tab­lish UK op­er­a­tions.

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