The Shanghai Futures Exchange ("SHFE") has recently issued the Detailed Rules on Inspections of Paper Pulp (Futures) (the "Rules"), immediately effective from the date of issuance.
The Rules cover "acceptance of inspections by designated inspection agencies", "preparation for inspections", "conducting of inspections", among others. It is made clear that bleaching nadelholz kraft pulp (BNKP) futures are subject to the brand-based delivery, and goods to be delivered must be authentic pulp of certain brands manufactured by those plants recognized by the exchange. Additionally, a designated inspection agency will only perform one-time sampling inspection to look at the quality and weight of declared goods to be stored in the warehouse. Where information indicated on the inspection document matches the goods concerned, a batch of inspections will be performed for every bill of lading. Furthermore, the Rules provide that, the weight inspection shall be conducted in accordance with pulp-related standards (GB/T 8944.1-2008 and GB/T 8944.2-2008) concerning the determination of saleable mass in lots, and that the number of sampling shall be equal to the number set for the initial inspection and 30 or 32 sample bales will be drawn from each batch to provide samples for the inspections. The Rules also state that, a designated inspection agency shall, within seven working days after the sampling has been completed on the spot, issue an inspection report on the quality and an inspection report on the weight.