The London Metal Exchange will launch a steel contract settled against prices from the Shanghai Futures Exchange on Oct. 27, embedding Chinese steel futures directly into one of the world’s most important industrial metals venues and advancing the “Shanghai price” as a benchmark in global steel markets.
The new contract, named the LME Shanghai Hot-Rolled Coil contract, will be cash-settled and based on the settlement price of the Shanghai Futures Exchange’s hot-rolled coil futures. The LME also outlined an incentive program for market participants providing quotes for the contract on its electronic trading platform.
The LME said in June it had signed an agreement with the Shanghai Futures Exchange and that trading would begin in October, without specifying a date. The latest announcement confirms the Oct. 27 start.
“From next month, the LME will be providing the market with a straightforward route to accessing what is widely regarded as the global benchmark for the flat steel sector,” MiRan Park, the LME’s chief business officer, said.
LME Chairman John Williamson said at the signing that the cooperation allows companies outside China to more easily participate in one of the world’s most liquid commodity contracts while enjoying the convenience of trading a cash-settled LME contract. The agreement will strengthen the exchange’s cash-settled steel product suite and reinforce its links with the world’s largest metals producer and consumer, he said.
Tian Xiangyang, chairman of the Shanghai Futures Exchange, described the settlement price authorization as a concrete step in opening China’s capital markets and building a world-class exchange. China’s steel industry is large and mature, and the futures market operates under sound regulation, he said. The cooperation will expand the international application of the “Shanghai price,” attract global steel companies and financial institutions to participate in price formation, and enhance the international influence of China’s steel futures, Tian added.
China is the world’s largest producer and consumer of hot-rolled coil. In 2025, output reached 325 million tons, accounting for 22% of total steel production, while exports totaled 21.52 million tons, about 20% of all steel exports. Shanghai hot-rolled coil futures have become the world’s largest flat steel futures contract, with average daily volume of about 700,000 lots and open interest of 1.9 million lots, and are increasingly used as a pricing reference for Chinese steel imported into Asia-Pacific, the Middle East, North Africa and South America.
The authorization marks the first time a Chinese futures exchange has partnered with a major international exchange on a metals contract, exporting the “Shanghai price” to an established overseas futures market. The LME, owned by Hong Kong Exchanges and Clearing Ltd., is the world’s oldest and largest industrial metals market. Once the new contract begins trading, global investors will be able to directly reference and use Shanghai hot-rolled coil futures prices for investment and risk management.
