Spot trading of crude oil opens in Tianjin

China has launched its first spot trading system in Tianjin for crude oil and coke -- the coal used in steel making. The exchange is part of the effort to transform Tianjin Binhai New Zone into a financial center in northern China.

The newly inaugurated Bohai Commodity Exchange (BOCE)is China's first joint-stock commodity board.

China's crude and coke consumption is one of the highest in the world. The country has been relying on New York WTI, and Brent crude futures as references or pricing markers for years.

The exchange will help give China control over internal prices by instituting a price cap on bulk commodities. On its first trading day, Friday, the exchange set the benchmark price of crude at 4,360 yuan per tonne, and coke at 1,550 yuan per tonne.

The Tianjin-based exchange is launching 24-hour spot trading of international crude and coke.

Its electronic trading system is connected with major financial markets around the world and all banking systems in China. The exchange will gradually open spot trading for other goods, like petrochemicals, and metals.