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On June 16, the "2017 China International Conference on Iron and Steel Financial Derivatives" was held in Shanghai. When addressing the conference, Wang Fenghai, CEO of Dalian Commodity Exchange (DCE), said that in the last five years DCE has seen the market trading volume keep an average annual growth rate of 25%, and the market has withstood a variety of tests, with the market operation in a stable and orderly way. Secondly, the market liquidity has remained at a reasonable level. In 2016 the average daily open interest on DCE accounted for 46% of the total in the domestic futures market, with the open interest of the corporate clients taking up 44% of the total on DCE. Thirdly, the correlation for the futures and spot prices of the products listed on DCE has maintained the high level. In 2016, the correlation coefficients for the futures and spot prices of the ferrous products including coking coal, metallurgical coke and iron ore stood at 0.98, 0.97 and 0.96 respectively. The correlation coefficients of the futures prices at home and abroad for the internationalized products of iron ore and palm oil reached 0.96 and 0.91 respectively.
Going forward, DCE will step up the service and support for the iron and steel industry in various aspects, and focus on advancing and improving the following tasks: first, we will continue to push forward the research and development as well as innovation in the ferrous futures products. We will vigorously prepare for introducing the new derivates instruments such as options and indices for the ferrous products so as to enrich the means for management of market risks. Secondly, we will steadily advance the internationalization of the iron ore futures. Thirdly, while implementing the iron ore warehouse receipt service system, we will develop innovative system containing remote delivery by factory warehouses and warehouse receipt-free delivery. Fourthly, we will implement the “insurance plus futures”, OTC options and other pilot programs, organize all forms of training, research and workshops, further explore the new models for serving industries, and improve the capacity and level of the iron and steel industry in using the futures market to manage the risks.
The "2017 China International Conference on Iron and Steel Financial Derivatives" was sponsored by China Iron and Steel Industry Association, supported by China Futures Association and jointly hosted by Metallurgical Council of China Council for the Promotion of International Trade and Shanghai Ganglian E-Commerce Co., Ltd.
