Traders can settle SHFE copper positions with bonded material
Dec 08, 2010 | 11:57 AM
Traders will be able to use copper in specified bonded warehouses in China, where material can be stored duty free, to settle positions on the Shanghai Futures Exchange (SHFE), China's Ministry of Finance said.
The development, details of which are still scarce, will reduce the cost of physically settling short positions on the SHFE because traders will no longer have to pay a required 17-percent value-added tax, market participants said.
"The move will provide one more channel for settlement and will facilitate the arbitrage between the London Metal Exchange and the SHFE; this is a clear trend," a metals analyst at Shanghai Cifco Futures Co. Ltd. said.....
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