China's securities regulator, the China Securities Regulatory Commission (CSRC), issued a notice on July 31, granting approval for the registration of coke options on the Dalian Commodity Exchange (DCE). Coke is a crucial raw material for steelmaking and coal chemical industries, and the introduction of coke options completes the risk management toolkit for the coal-coke-steel supply chain, supporting stable raw material supplies, enhancing supply chain resilience, and promoting high-quality manufacturing.
China is the world's largest producer and consumer of coke, with an annual output exceeding 500 million tons, accounting for over 67% of global production for years. This makes coke a core industrial raw material for infrastructure and equipment manufacturing. To help real-economy companies hedge against price volatility, the DCE launched coke futures in 2011. Over the past decade, these futures have fulfilled key functions of price discovery, hedging, and resource allocation, with the market maturing steadily. In June 2026, the DCE optimized risk control parameters for coke futures, improving market liquidity and investor structure. The correlation between futures and spot prices reached 0.94. Post-adjustment, average daily trading volume for coke futures is around 90,000 lots, with average open interest of about 77,000 lots, and institutional investors hold nearly 70% of positions. Widespread participation from coking, steel, and trading companies has laid a solid foundation for the smooth launch of coke options.
In recent years, multiple factors have caused significant fluctuations in coke spot prices, pressuring operations for companies across the supply chain. Demand for sophisticated and diversified risk management tools from coking enterprises, steel mills, and traders has been growing, with the market eagerly awaiting coke options. Once listed, coke options will work in tandem with coke futures, coking coal futures and options, and iron ore futures and options, creating a comprehensive risk management system for steel raw materials. This will better meet the precise and combined price hedging needs of supply chain companies.
Shi Yanfeng, President of the China Coking Industry Association, noted that the coking industry's transformation is deepening, and price volatility has become normal. Relying solely on futures hedging cannot meet refined risk management needs. The approval of coke options fills a key gap in the risk management toolkit for the black metal supply chain, enabling companies to use coke, coking coal, and iron ore futures and options together to more effectively hedge production and operational risks, helping the industry navigate cycles and achieve high-quality development.
Wang Ruochen, Deputy General Manager of Shanxi Minguang New Energy Technology Co., Ltd., said the arrival of coke options addresses a major shortfall in the black metal supply chain's risk management. Options offer asymmetric risk-return profiles, alleviating the high margin pressure of pure futures hedging. This allows companies to flexibly design risk control plans, stabilize production expectations, and enhance the industry's ability to withstand market volatility.
Lan Min, Deputy General Manager of Zheshang Futures' risk management subsidiary Zheshi Industrial, commented that after coke options are listed, supply chain companies can construct dynamic "futures + options" portfolios for richer hedging strategies. On one hand, options can lock in buying and selling price floors, hedging against one-sided sharp price movements and reducing hedging costs. On the other hand, selling options can boost operational income. Additionally, scientifically using options can improve capital efficiency and promote the large-scale adoption of innovative models like option-inclusive trade.
Moving forward, the DCE will collaborate with market participants to advance preparatory work for the coke options launch, promptly release option contract rules, conduct tiered market education and industry training, guide real-economy companies to rationally and scientifically use options to manage price risks, and continuously improve the derivatives market's service to the coal-coke-steel real economy.