Core Viewpoint - The launch of the first recycled metal derivatives, specifically casting aluminum alloy futures and options, marks a significant advancement in China's green finance market, providing a new perspective for risk management and supporting the development of the circular economy [2][4][8]. Summary by Sections Launch of Recycled Metal Derivatives - The Shanghai Futures Exchange has officially listed casting aluminum alloy futures and options, filling a gap in the domestic futures market for recycled metals [2][5]. - On the first trading day, the main contract closed at 19,190 yuan/ton, up 825 yuan/ton, a 4.49% increase from the listing price, with a total trading volume of 57,300 contracts and a transaction value of 11.01 billion yuan [5]. Industry Overview - Casting aluminum alloy, primarily made from scrap aluminum, is a key pathway for low-carbon transition, with energy consumption only 3%-5% of that of traditional electrolytic aluminum production [6]. - The carbon emissions from producing one ton of casting aluminum alloy are approximately 3.6% of those from electrolytic aluminum, saving 3.4 tons of standard coal and 22 tons of water [6]. - China's recycled aluminum production is expected to exceed 10 million tons in 2024 and reach over 18 million tons by 2030, with the new derivatives promoting standardized development in the industry [6]. Complete Aluminum Industry Chain - The introduction of casting aluminum alloy futures and options completes the risk hedging system for the aluminum industry, covering the entire supply chain from bauxite to recycled aluminum [7]. - Companies can now use these derivatives to manage risks associated with raw material costs and product price fluctuations, enhancing the resilience of the entire aluminum industry chain [7]. Green Finance and Risk Management - The emergence of casting aluminum alloy derivatives signifies a new phase in green finance, moving beyond traditional credit and bond products to include market-based pricing and risk hedging mechanisms [8][10]. - These derivatives allow companies to lock in costs for recycled materials and manage price volatility, thus enhancing operational efficiency and competitiveness in the low-carbon economy [8][10]. Innovation in Green Financial Products - The derivatives market introduces innovative functions for green finance, transitioning from single financing tools to comprehensive risk management platforms [11]. - The development of structured financial products that combine futures with green indicators, such as carbon emissions and recycling rates, is encouraged [16]. Recommendations for Financial Institutions - Financial institutions are advised to expand their green finance product offerings and enhance competitive differentiation, particularly in the carbon market, where China's trading volume is significantly lower than that of the EU [16][18]. - Collaboration between banks and futures exchanges is essential to create a comprehensive risk management system that supports the green transition of the real economy [15][18].

Report Summary 1. Investment Rating - No investment rating for the industry is provided in the report. 2. Core Viewpoints - The cast aluminum alloy options were listed on June 10, 2025. In the first week after listing, the implied volatility of the options was relatively high compared to Shanghai aluminum options, and the volatility curve was slightly negatively skewed. The trading volume shifted from a state where the call - option volume was nearly twice that of the put - option volume on the first day to a state where the put - option volume and open interest were larger. The open - interest market value of aluminum alloy options was close to one - tenth of that of Shanghai aluminum options. Considering the long time to expiration, a small - scale option covered strategy can be used for spot - futures hedging [1]. 3. Summary by Directory 3.1 Cast Aluminum Alloy Options Listing Overview - On June 10, 2025, the cast aluminum alloy futures were listed on the Shanghai Futures Exchange, and the option contracts corresponding to AD2511 and AD2512 futures contracts started trading at night. The initial number of option contracts was 144, with an equal number for the two - month contracts. As the underlying futures price rose, the option contracts added multiple strike prices. By the end of Friday, there were a total of 150 option contracts, including 74 near - month contracts [1][4][6]. - The trading enthusiasm was high on the first day of option listing, with a total trading volume of 8,576 contracts, and nearly 95% of the volume was achieved in the 2511 option contracts. The total open interest was 2,765 contracts, and the 2511 option contracts also accounted for over 94%. As the market stabilized and the time to expiration was far away, the trading enthusiasm decreased [6]. 3.2 Cast Aluminum Alloy Options Trading Structure - On the first day of futures listing (June 10), the actual volatility of the main contract was about 19%, and then it gradually declined. The implied volatility of the corresponding options dropped to around 13% by the close of June 11, slightly lower than the actual futures volatility on that day. Subsequently, the actual volatility further decreased, while the implied volatility of the options remained relatively high, reflecting the forward - looking effect of volatility in option pricing [8]. - The implied volatility of put options was relatively higher. During the market stabilization process, the implied volatility of call options declined faster, and the volatility curve changed from an almost symmetric structure to a negatively skewed one. On the first day of option listing, the trading enthusiasm for call options was high, with a single - day trading volume of 5,590 contracts, but the open interest after settlement was only 1,564 contracts, and the trading - to - open - interest ratio was nearly 3.6 times. The trading volume of put options was only 2,986 contracts on the first day, with an open interest of 1,201 contracts. However, the implied volatility of put options was relatively high, indicating that the selling force in the option market was relatively stronger, and the continuous decline in implied volatility also suggested more participation in selling options [10]. 3.3 Option Strategies - Since the current option contracts are far from expiration and the volatility level is expected to decline further, a covered option combination can be considered to enhance the income of spot trading when the spot trading period matches. The option covered strategy involves selling call options when holding spot inventory or long futures positions, and for downstream enterprises, it can be selling put options while having purchase needs or short futures positions. If the sold option contracts are not exercised at expiration, the entire option premium is earned; if they are exercised, a position opposite to the spot or futures position is obtained for effective hedging [16]. - For example, the current price of the AD2511 futures contract is about 19,700 yuan/ton, and the price of an out - of - the - money call option with a strike price of 21,000 yuan/ton is about 150 yuan/ton. If an upstream enterprise sells this contract until the option contract expires on October 27: if the futures price is lower than 21,000 yuan/ton, a profit of 150 yuan/ton is earned, and the option contract automatically expires. If the futures price is higher than 21,000 yuan/ton, a short futures position with a cost price of 21,000 yuan/ton is obtained, and an additional profit of 150 yuan/ton in option premium is earned, effectively locking in the selling price at 21,150 yuan/ton [17].

Group 1: Cross-Border Financial Services - The People's Bank of China, along with other regulatory bodies, has launched an action plan to enhance cross-border financial services, supporting enterprises in their international expansion [1] - A series of reports titled "Financial Escort for Enterprises Going Abroad" has been initiated to showcase successful practices in cross-border financial services [1] Group 2: Financial Innovation and Events - The 2025 China International Financial Expo will take place from June 18 to 20, featuring a new "FinTech Solutions" section to display cutting-edge technologies in finance [3] - The Shanghai branch of the Agricultural Bank has introduced multiple "carbon element" linked loans, contributing to carbon finance initiatives [15] Group 3: Green Finance Initiatives - A joint notification has been issued by nine departments to leverage Shanghai's role as an international green finance hub, proposing 20 specific measures to support green finance projects [4] - The successful transaction of green certificates for a solar power project by China Everbright Leasing marks a significant step in green finance innovation [12] Group 4: Financial Market Developments - The first recycled commodity futures and options for aluminum have been launched, indicating a new market for sustainable materials [6] - The total issuance of technology innovation bonds has exceeded 374.8 billion yuan within the first month of their introduction, reflecting strong market interest [17] Group 5: Insurance and Risk Management - A domestic trade credit insurance co-insurance body has been established to enhance insurance capacity and meet enterprise needs, initially providing 10 billion yuan in coverage [14] - The Shanghai insurance industry is actively promoting the third pillar of the pension system, focusing on personal pension policy education and service [13]

Group 1: Hydrogen Energy Initiatives - The National Energy Administration has launched pilot projects for hydrogen energy, aiming to innovate management models and explore diversified development paths within three years [1] - The pilot projects are expected to provide replicable experiences to support the entire hydrogen energy chain, including production, storage, transportation, and utilization [1] Group 2: Methane Emission Control - China's coal mine methane extraction is projected to reach 13.5 billion cubic meters in 2024, with a utilization rate of 44.4%, exceeding 6 billion cubic meters [2] - The establishment of over 20 low-concentration gas and wind drainage gas oxidation utilization projects demonstrates significant progress in methane emission control [2] Group 3: Recycling and Circular Economy - The launch of aluminum alloy futures and options on June 10 marks the introduction of China's first recycled commodity futures, enhancing the pricing system for recycled metals [3] - This financial tool is expected to promote resource recycling and support the low-carbon transition of the aluminum industry [3] Group 4: ESG Support for SMEs - The "ESG One" platform in Hong Kong has attracted over 1,200 enterprises within six months, with 95% being small and medium-sized enterprises [4] - The platform integrates assessment tools, technical support, and training resources to provide comprehensive sustainable development solutions [4] Group 5: Green Methanol Production - Shanghai Electric's green methanol integrated demonstration project is set to produce its first batch of green methanol in July, marking a significant step in commercializing green hydrogen-derived fuels [5][6] - This project aims to provide a viable pathway for the low-carbon transition in the shipping industry [6] Group 6: Climate Change Adaptation - South Africa has launched its first coastal climate change adaptation plan to address threats such as rising sea levels and extreme weather [7] - This initiative reflects proactive measures by developing countries to tackle climate crises, offering a practical example of balancing pollution reduction and adaptation [7]

Core Viewpoint - The launch of casting aluminum alloy futures and options on June 10 marks a significant step for China's futures market, aligning with the country's "dual carbon" strategy and enhancing the pricing mechanism for aluminum alloys [3][5][9] Group 1: Market Performance - On the first trading day, the main contract AD2511 opened with a price of 18365 yuan/ton, rising to 19190 yuan/ton by the close, reflecting a 4.49% increase with a trading volume of 9723 lots [3][7] - The contract experienced a peak increase of over 5% during the trading session, indicating strong market interest [3][7] - On June 11, the closing price for AD2511 was 19400 yuan/ton, with a slight increase of 0.91% [3] Group 2: Pricing and Cost Analysis - The average cost of aluminum alloy production was reported at 20086 yuan/ton, indicating a loss of 486 yuan/ton for producers, with varying costs across regions [4][8] - The initial listing price of 18365 yuan/ton was considered low compared to the current market price of around 20000 yuan/ton, creating an arbitrage opportunity for traders [7][8] - The pricing discrepancy reflects underlying industry challenges, including weak demand and cost pressures [7][8] Group 3: Industry Context and Future Outlook - China is the largest producer and consumer of casting aluminum alloys, with an estimated production capacity of 13 million tons and a consumption of 6.73 million tons in 2024 [5] - The aluminum alloy market is characterized by its applications in various sectors, including automotive and electronics, and is crucial for recycling and low-carbon initiatives [5][6] - Analysts suggest that the price of AD2511 may experience volatility due to seasonal demand fluctuations and raw material price changes, with short-term upward momentum expected [8][9]

Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - On June 10, 2025, cast aluminum alloy options were officially listed for trading. The market performance on the first trading day was stable, with a total trading volume of 8,485 lots. The trading was concentrated on the main contract AD2511, indicating a certain bullish sentiment in the market. [1][21] - The implied volatility of cast aluminum alloy options is slightly higher than the historical volatility of the spot. The price of cast aluminum alloy on the spot side has limited downward space, but there is pressure on the subsequent social inventory to accumulate. The price on the disk can be traded in the short - term range. [2][33] - Speculative strategies can consider constructing short strangles to earn Theta income. Hedging strategies include upstream enterprises buying put options to hedge the risk of falling sales prices, or constructing covered strategies by selling out - of - the - money call options, and combining them to construct collar strategies. [3][33][34] Summary by Directory 1. Cast Aluminum Alloy Option Compliance Rules - **Listing and Contracts**: Cast aluminum alloy options were officially listed for trading on the night session of June 10, 2025. The first batch of listed contracts were the option contracts corresponding to the AD2511 and AD2512 futures contracts. The contract details include the contract subject, type, trading unit, etc. [1][9][11] - **Pricing and Limits**: The listing benchmark price is calculated by the binomial tree option pricing model. The daily limit is ±7%, and it is twice that on the first day. The maximum order quantity per order is 100 lots. [9][10] - **Exercise and Position Management**: It is an American - style option. The option and futures contracts are separately limited in position. The cast aluminum alloy options and futures share the approved hedging trading positions. [14][16][18] - **Fees**: The trading fee is 10 yuan per lot, and the fee for closing positions on the same day is temporarily waived. From the listing date to December 31, 2025, the hedging trading fee is halved. [19] 2. First - Day Trading Situation - The total trading volume on the first trading day was 8,485 lots, concentrated on the main contract AD2511, accounting for 28.89% of the AD2511 futures trading volume. The trading volume PCR was 52.99%, the open interest PCR was 77.64%, and the turnover PCR/volume PCR was 94.92%, indicating a certain bullish sentiment. [1][21] - The trading and open interest of the main options were mainly concentrated in the slightly out - of - the - money and deeply out - of - the - money areas. The main strike prices of call options were concentrated at 19,500 yuan/ton and 21,400 yuan/ton, and those of put options were at 19,200 yuan/ton and 17,200 yuan/ton. [22] 3. Volatility Situation - The AD2511 option has 93 trading days until expiration. The 90 - trading - day volatility of the current spot price is 10.42%, and the historical one - year minimum, average, and maximum are 8.47%, 11.25%, and 12.48% respectively. The 90 - trading - day volatility of the Shanghai aluminum futures index is 12.06%. [2][25][26] - The implied volatility of the main at - the - money option of cast aluminum alloy is 12.60%, higher than the historical volatility of the spot and Shanghai aluminum futures. The option implied volatility shows a relatively smooth volatility smile distribution, providing a certain safety margin for the short - option strategy. [2][26] 4. Option Synthetic Futures Arbitrage Test The premium rate of the synthetic futures of cast aluminum alloy main options is between - 0.36% and 0.19%, indicating that the market prices the options reasonably and there are no obvious arbitrage opportunities. [30] 5. Option Strategy Recommendations - **Market Analysis**: From May to August is the traditional off - season for aluminum alloys. The spot price of cast aluminum alloy has limited downward space, but there is pressure on social inventory to accumulate. The price on the disk can be traded in the short - term range, with support at 19,000 yuan/ton and resistance at 19,800 yuan/ton. [3][33] - **Speculative Strategy**: Construct short strangles to earn Theta income, but pay attention to risk control. [3][33] - **Hedging Strategy**: Upstream enterprises can buy put options, sell out - of - the - money call options, or combine them to construct collar strategies. [3][33][34]

Core Insights - The launch of casting aluminum alloy futures and options on June 10 marks a historic moment for China's futures market, filling a gap in the domestic recycled metal derivatives market and providing new risk management tools for aluminum industry chain enterprises [1][3]. Market Performance - The first trading day of casting aluminum alloy futures saw an overall upward trend, with the main contract AD2511 opening at 19,400 CNY/ton and closing at 19,190 CNY/ton, an increase of 825 CNY/ton or 4.49% from the listing benchmark price of 18,365 CNY/ton [3]. - The trading volume reached 57,300 contracts with a transaction value exceeding 11.011 billion CNY, and the open interest stood at 11,500 contracts, indicating strong market interest [1][3]. - The main contract AD2511 was particularly active, with a single-day transaction of 52,300 contracts and a transaction value of 10.1 billion CNY, reflecting high market engagement [3]. Industry Participation - A total of nine well-known enterprises actively participated in the trading on the first day, including Lichong Sihua Light Alloy Group, Chongqing Shunbo Aluminum Alloy Co., and others, demonstrating strong interest from the industry [4]. - The participation of these companies highlights the urgent demand for risk management tools in the aluminum alloy trade sector, as they are sensitive to price fluctuations and have pressing hedging needs [4]. Risk Management Framework - The introduction of casting aluminum alloy futures improves the hedging effectiveness compared to previous aluminum futures, forming a comprehensive risk hedging system alongside alumina futures and Shanghai aluminum futures [4]. - This new tool allows trading companies to stabilize their operations and better serve their upstream and downstream clients by providing diverse pricing and risk management services tailored to various market conditions [4].

Core Viewpoint - The launch of casting aluminum alloy futures and options on June 10 marks a significant milestone for China's futures market and the recycling metal industry, enhancing risk management and promoting high-quality development in the aluminum sector [1][2]. Group 1: Market Launch Details - The first trading of casting aluminum alloy futures occurred at the Shanghai Futures Exchange, with seven contracts listed at a benchmark price of 18,365 yuan/ton [1]. - On the first trading day, a total of 57,300 contracts were traded, amounting to 11.011 billion yuan, with an open interest of 11,500 contracts [1]. - The main contract, AD2511, closed at 19,190 yuan/ton, reflecting a 4.49% increase [1]. Group 2: Industry Impact - The introduction of casting aluminum alloy futures and options is seen as a key development in integrating finance with the non-ferrous metal industry, enhancing China's international influence in aluminum production [1][2]. - The launch is expected to provide companies with effective risk management tools, addressing previous shortcomings in hedging against price fluctuations in aluminum alloys [2]. - The listing has garnered positive responses from industry players, with several well-known companies actively participating in the trading [2]. Group 3: Role of Intermediaries - Futures companies are positioned to offer comprehensive services, from standardized contracts to customized solutions for risk management in the aluminum industry [3]. - The ability to design personalized products based on standardized contracts will enhance the precision of risk management services for enterprises [3]. - Futures companies can facilitate industry participation in the futures market through simple methods, leveraging their risk management subsidiaries [3].

Core Viewpoint - The launch of casting aluminum alloy futures and options on June 10 marks a significant milestone for China's futures market, enhancing price discovery and risk management capabilities within the aluminum industry [1][4]. Group 1: Market Performance - The first trading day saw a total transaction amount exceeding 11 billion yuan, with all seven contracts closing higher, particularly the main contract AD2511, which rose by 825 yuan/ton, a 4.49% increase from the listing price [2]. - The main contract AD2511 had a trading volume of 52,300 lots, accounting for 101 billion yuan of the total transaction amount, with a closing position of 9,723 lots [2]. Group 2: Industry Participation - Several leading companies in the aluminum industry actively participated in the trading of casting aluminum alloy futures, including Lichong Sijun Light Alloy Group, Chongqing Shunbo Aluminum Alloy Co., and others [4]. - The participation of these companies is crucial for the futures market to effectively perform its price discovery function, as the application of futures tools in the non-ferrous metal industry has become well-established [4]. Group 3: Industry Implications - The launch of casting aluminum alloy futures and options is seen as a key development for the recycling metal industry, contributing to resource security and promoting green and low-carbon transformation [4]. - The introduction of these financial instruments is expected to enhance the international influence of China's aluminum industry and support the establishment of a comprehensive risk management system [4].

Core Viewpoint - The launch of casting aluminum alloy futures and options in China aims to establish a transparent and efficient pricing mechanism, enhancing risk management capabilities within the aluminum industry and promoting sustainable development [2]. Group 1: Market Performance - The first day of trading for the main contract AD2511 saw an opening price of 19,400 CNY/ton and a closing price of 19,190 CNY/ton, reflecting an increase of 825 CNY/ton or 4.49% from the listing benchmark price of 18,365 CNY/ton [3]. - A total of 57,300 contracts were traded, amounting to 11.011 billion CNY, with an open interest of 11,500 contracts [3]. Group 2: Investor Sentiment and Price Expectations - Analysts noted that the initial high opening was due to the low benchmark price set by the exchange, leading to a narrow trading range and a back structure in the market, indicating a consensus among investors regarding a bearish outlook for future prices [3]. - The expected price range for the AD2511 contract is projected to be between 18,000 CNY/ton and 19,700 CNY/ton, influenced by supply pressures and cost support [4]. Group 3: Industry Outlook - The aluminum alloy production capacity is anticipated to continue increasing, with demand primarily driven by the automotive sector, likely resulting in a supply surplus [3]. - The current spot price for ADC12 is estimated to be between 19,500 CNY/ton and 20,000 CNY/ton, with production costs around 20,086 CNY/ton, suggesting potential buying opportunities at lower prices [4].