Great Ball of Money Rush­ing into Com­modi­ties Fu­tures

The Economic Times - - Markets: Beating Volatility -

Hong Kong: Chi­nese spec­u­la­tors have a new ob­ses­sion: the com­modi­ties mar­ket.

Trad­ing in fu­tures on every­thing from steel re­in­force­ment bars and hot-rolled coils to cot­ton and polyvinyl chlo­ride has soared this week, prompt­ing ex­changes in Shang­hai, Dalian and Zhengzhou to boost fees or is­sue warn­ings to in­vestors. While the un­der­ly­ing prod­ucts may be any­thing but glam­orous, the num­bers are eye-pop­ping: con­tracts on more than 223 mil­lion met­ric tons of re­bar changed hands on Thurs­day, more than China’s full-year pro­duc­tion of the ma­te­rial used to strengthen con­crete. “The great ball of China money is mov­ing away from bonds and stocks to com­modi­ties," said Zhang Guoyu, a Shang­hai-based an­a­lyst at Te­bon Se­cu­ri­ties. “We’ve seen a lot of peo­ple open­ing ac­counts for com­modi­ties fu­tures re­cently."

The frenzy echoes the ac­tiv­ity that fu­eled China’s stock mar­ket last year be­fore a rout erased $5 tril­lion, and fol­lows ear­lier bub­bles in prop­erty to gar­lic and even cer­tain types of tea.

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