Futures turnover breaks record in May

Turnover at China's futures markets hit a new monthly high in May, according to data released Monday by the China Futures Association (CFA).

A total of 26.5 trillion yuan ($4.32 trillion) in futures contracts were transacted at domestic derivatives bourses in May, up 22.6 percent month-on-month and 98.81 percent year-on-year to break the previous record of 24.5 trillion yuan set in March, statistics from the CFA show. In terms of volume, 205 million contracts changed hands last month, up 91.18 percent from May 2012 and up 17.49 percent relative to April.

According to Li Zhoulei, a senior analyst from Shanghai Cifco Futures, a lack of consensus on the market's prospects was a driving force behind the spike in trading sentiment.

Since the futures market's rally in February, many local contracts have tracked the downward movements of their international counterparts, Li said. On the one hand, he explained, concerns about continued price corrections have compelled many investors to sell off their contracts; while many others have been just as eager to buy in ahead of a predicted recovery.

Citing copper as an example, Li stated that, "When copper futures trading on the Shanghai Futures Exchange (SHFE) took sizable and prolonged tumbles in April, one camp believed the market was bottoming out, while others feared the bearish conditions would persist. These notions pulled both groups of investors off the sidelines in May." Turnover on copper futures totaled 5.46 trillion yuan in May, up 42 percent compared with April, according to data from the SHFE. Li remarked that rebar, soybean meal and stock index futures also saw noticeable surges in turnover due to mixed opinions on the market's trajectory.

May's turnover accounted for roughly one-fourth of the 108.55 trillion yuan in transactions seen at Chinese futures markets during the first five months of 2013, up 99.04 percent year-on-year, CFA figures show.

China's four futures exchanges, including the SHFE, the Dalian Commodity Exchange, the Zhengzhou Commodity Exchange and the China Financial Futures Exchange, saw their transaction volumes increase 67.06 percent, 132.21 percent, 23.74 percent and 127.07 percent year-on-year respectively in May.