Dalian Commodity Exchange (DCE) organized the 1st futures business training on iron ore basis trading for overseas industry clients on December 5 to 7. Nearly 30 chiefs of relevant business from mines, trading companies and steel plants of 6 countries took part in the training. Experts from Shanghai Advanced Institute of Finance, Cargill Investment, Nanjing Iron and Steel and DCE delivered lectures on the basic functions of the futures market, the contract design and internationalization progress of iron ore futures and the hedging and basis trading of enterprises. The trainees were organized to visit the Dalian Port Iron Ore Bonded Delivery Warehouse.
Wang Fenghai, Deputy Party Chief and CEO of DCE, said in the speech that iron ore futures officially ushered in overseas traders on May 4 this year, and DCE has initially realized the strategic transformation to a diversified and open comprehensive derivatives exchange. Currently, the iron ore futures has been in steady operation. From May to November of this year, the accumulated trading amount of iron ore futures was 118 million contracts (unilaterally), presenting sufficient liquidity and rational market structure; the correlation coefficients of iron ore futures price with spot price, Platts Index and Singapore swap price were 87%, 95% and 96% respectively since May, showing its great interaction with spot goods and overseas market and its increasingly stable market operation; in September, the 1st order of 10,000 ton iron ore futures bonded delivery of an overseas client was completed at Dalian Port, realizing the concurrent tax payment and bonded delivery of iron ore futures and the simultaneous participation of domestic and overseas traders. Up till now, 7 of the top 10 iron and steel enterprises in China and top 5 trading companies in the world have participated in iron ore futures trading, and the market recognition has been further enhanced. The further functioning and increasing influence of iron ore futures have made it possible to provide international companies with price service and risk management service.
This training for overseas industry institutions is one of the key measures of DCE to further intensify the publicity and expansion of overseas market and enrich the structure of market participants after the official usher-in of traders of iron ore futures. In the training, relevant experts systematically introduced the rules, systems and supervision concept of the DCE futures market and the basis trading based on iron ore futures price from the perspective of market application, which has further increased overseas industry clients’ understanding on the iron ore futures market. Zhang Nengjie, a trainee representative from Mitsubishi Corporation RtM International, said that the training is well organized and the lectures are very pragmatic, which have enhanced his team’s ability of dealing with the constantly changing market, offered new perspective to traditional marketing personnel and laid a good foundation for the company to keep exploring business modes and solutions. He said that the company would attempt to take part in the futures trading and basis trading of DCE.
Next, DCE will continue to intensify overseas market expansion, popularize futures instruments application to more industry institutions, and boost the futures market to better serve the real economy, international trading and the new order of international economy.
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