Chinese firms look to strike gold in a volatile global metals market

Fri July 10 2026

Chinese futures brokerages and exchanges are ramping up their global expansion push as the country’s miners and manufacturers look to grow their footprint in the global commodity market amid geopolitical tensions and the rising importance of critical metals.

The go-global drive reflects growing demand by Chinese companies for more efficient hedging tools to avert risks arising from high volatility in global metal prices.

In the first quarter of this year, Chinese mining and metal companies completed cross-border merger and acquisition (M&A) deals worth US$6.17 billion, a more than 10-fold jump from the same period in 2025, according to international consultancy EY.

The overseas acquisition deals accounted for nearly half of the country’s total M&A value during the same period, the consultancy’s data showed.

The largest transaction of the first quarter was sealed by Zijin Mining, China’s largest in the sector, which acquired Canada’s Allied Gold for 28 billion yuan (US$4.12 billion). The North American miner holds 533 tonnes of global gold reserves.

“From a national security perspective, gold and copper stand out as the most vital reserve asset and industrial metal,” wrote Huang Zhuoran of Hong Kong-based China Construction Bank (Asia) in the April edition of Trade Finance magazine. “Over recent years, major global powers have placed greater emphasis on strategic resource security and resilient supply chains.

“Against a backdrop of rising metal prices … overseas investment by domestic firms to secure supply of critical metals has become a rational choice.” As businesses become more global in their outlook, they also usually usher in greater demand for international financial services.

For example, two Shanghai-based futures brokers, having spotted ample opportunities abroad, are seeking London Metal Exchange (LME) membership. Meanwhile, several domestic mining heavyweights have also raised their annual hedging limits. Shandong Gold Mining, which has overseas subsidiaries, lifted its 2026 hedging budget for both domestic and international markets by 51 per cent year on year to 5.3 billion yuan, according to its exchange filing.

“Given divergent pricing between global and domestic markets, it’s only natural for them to trade metal derivatives overseas to mitigate exposure to price volatility,” said Liu Shiyao, an analyst at Zijin Tianfeng Futures, controlled by Zijin Mining. “China’s commodity producers posted robust earnings in the first half of the year amid volatile but elevated metal prices. We have observed some of our clients ramping up hedging activities on home and overseas markets to lock in those gains in recent months.” Domestic future brokerages have already stepped up their global push amid increasing demand from mining firms to conduct overseas trading.

Sources at two Shanghai-based futures companies told the South China Morning Post that they are applying for membership on the LME, which was bought by Hong Kong Exchanges and Clearing in 2012.

“Our clients [mainly miners] wanted us to go abroad,” one of them said. “They thought derivatives trading with overseas financial institutions came with higher costs.”

Another Chinese broker, disclosed that the firm was applying for authorisation from the Financial Conduct Authority in London, the UK’s independent regulatory body that oversees financial services firms and markets.

Source: https://www.qatar-tribune.com