SHANGHAI (Dow Jones)--The Shanghai Futures Exchange's new benchmark lead contract opened 4.8% higher in its debut session Thursday morning, and held on to most of its gains in relatively busy trade. A healthy 59,990 lots were done for all lead contracts by the midday break--lower than the traded volume for zinc futures, but potentially a promising sign that there will be investor interest from some quarters of the market. "It is the first day, and it's too early to assess whether lead will gain the same traction as zinc or copper," Shanghai Cifco Futures lead analyst Xiang Yu said. "We do have clients who opened accounts, but there's still caution about actually trading." The SHFE hopes the cash-settled lead futures--the fourth base metal contract it has launched after zinc, copper and aluminum--will capture some share of the growing commodity market in Asia and eventually gain some pricing power over its bellwether London Metal Exchange counterpart. Benchmark September lead was at CNY18,955 a metric ton midday, up 3.3% from an exchange-set base price of CNY18,350/ton, and off a session high of CNY19,570/ton. The exchange set upper and lower price movement limits on the first day at 12%, and these will be halved to 6% in subsequent sessions. The lead futures contracts, in lot sizes of 25 tons, are expected to particularly appeal to corporate investors who typically use futures contracts as a hedging tool against fluctuations in metal prices. Lead futures trading also provides another financing tool for enterprises who traditionally use bank loans or selling shares in the equity market to raise funds, Zeng Binglin, Vice President of Zhuzhou Smelter Group Co. (600961.SH), said in a statement sent via the SHFE. Still, industry participants said the lot size of the lead contracts may deter individual investors. "I don't think it's going to attract a lot of traction because the lot size of 25 tons is too big for retail investors, who account for a substantial portion of the futures trading market in China," said a market participant in Shanghai, adding that he wouldn't participate in lead futures trading. "Speculators would rather do zinc instead of lead," due to zinc's smaller lot size of five tons, he said. Zhuzhou Smelter, China's largest zinc producer by output and a major lead producer, did the first lead futures trade, selling the contract at CNY19,230/ton, according to a SHFE statement.

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