In 2014, Dalian Commodity Exchange (DCE) experienced brisk trading in new products, which accounted for 96% of the trading volume of new products in China's mainland, and DCE has became ready for listing agricultural options. The average daily precipitation funds of the exchange and its members reached over RMB 57 billion.
Influence Expanded from Dalian to the Whole Country
Lately, the General Administration of Customs gave an official reply to Dalian Customs, which approved DCE to conduct iron ore futures delivery in the tariff-free zone.
Leading Role
In the past year, under the situation of industrial transformation, the market has shown more significant risk management function. In 2014, DCE’s oils prices have decreased by over 20%. Because over 90% of domestic large soybean pressing enterprises and over 80% of domestic large palm oil import enterprises have participated in futures hedging with oil pressing enterprises realized half of their contracts through the basis pricing mode of “futures price + premium and discount” and thus locked in their future sales prices in advance, they have effectively avoid the loss caused by the later price falling.
DCE has also taken the initiative to assume social responsibility and kept innovating the mode of serving the agriculture, farmer, and rural area. For example, farmers and cooperatives have signed the minimum guaranteed lease agreement, which will guarantee the lowest income and share the bonus brought about by price rising; and cooperatives can obtain customized over-the-counter options from the risk management subsidiaries of futures companies. Futures companies can hedge against risks in the futures market, thus realizing the effective risk transfer layer by layer. In 2014, DCE has promoted the mode of “order + futures + over-the-counter options”, with the cooperation of Jilin Changling Yuntianhua Agricultural Cooperatives and Yong’an Futures. Farmers, cooperatives, and futures companies have all benefited from it.
Driving Effect
DCE now has 206 delivery points (counted according to products) covering 13 provinces and municipalities across China, and over 20 delivery points are in Liaoning Province. While promoting the regional economic integration, the futures market has also facilitated the development of regional logistics industry.
DCE’s rapid development has also driven the construction of Dalian regional financial center. Dalian now has 4 futures companies and over 70 business divisions of futures companies. The Futures Building invested and constructed by DCE has attracted 97 financial institutions of over 3,000 employees. DCE now has 11 margin depositing banks and its average daily precipitation funds reach RMB 29.7 billion, which, coupled with those of its members, makes its total average daily precipitation funds exceed RMB 57 billion. And most of the funds come from other places out of northeast China.
The rapid development of DCE has also provided local area with stable and important tax revenues. For many years, its tax amount has always maintained a top position in the local area.