It is reported that iron ore is the second open commodity futures market after China introduced crude oil futures at the end of March. However, unlike crude oil, the iron ore contract launched by Dalian Commodity Exchange 20 13 has excellent liquidity, while major traders in western countries enter the market through local institutions in China.
Profile picture: Yingkou, Liaoning, an iron ore yard in the port.
According to the report, Dalian's iron ore trading volume last year reached 20 times of the global iron ore trading volume and 25 times of the iron ore contract of Singapore Exchange. China iron ore futures can often affect the pricing of spot indicators. Opening direct access to foreign capital will only enhance this influence.
"The iron ore futures of Dashang will become a leading indicator. This was the case in the past and will be the case in the future because of the huge trading volume." Keller Teohar, an iron ore derivatives broker at Clarkson Asia Pte Ltd, said.
People familiar with the matter said that some global commodity traders have traded iron ore futures through their business branches registered in China.
"The internationalization of Dalian iron ore futures contract will enable global commodity associations to participate in the trading of the world's largest onshore black (metal) market," Kirk Lee, managing director of Cargill Metals, said in an email.
He said that all the more global participants in Dalian Mercantile Exchange should promote "more effective pricing and improve liquidity".
According to the report, oil, gold and copper are priced in London and new york, but iron ore is different. It is one of the few commodities that China refers to in global pricing.
Source: Reference News Network