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A spokesman of Dalian Commodity Exchange (DCE) said on March 10 that to address the significant fluctuations of iron ore prices and the high volume to open interest ratios recently, DCE has taken such measures as increasing the price limits and the minimum trading margin and cancelling the discount for the intra-day trading fee starting on the March,14. Those measures were helpful to improve the anti-risk capability, guard against overheated trading, and prevent and control potential market risks as early as possible, and ensure the safe and stable operation and functioning of the market.
The spokesman said that since the iron ore futures were listed of on DCE, their market operation has been stable with steadily improving liquidity and transparent and rational pricing. With the influence continuously expanded, the iron ore futures have given effective play to the functions of price discovery and hedging. Also the iron ore futures have played an important role in the industrial restructuring, transformation and upgrading and changing of business modes in the enterprises by their active participation and utilization. Recently, in the context of the fluctuations in the international bulk commodity market and the corresponding changes in macroeconomic, monetary and related industrial situations on domestic market, the sector of the ferrous products including the iron ore has recorded significant price fluctuations and active trading. Based on the changes in both spot and futures markets, in order to enhance the anti-risk capability of the market, DCE has increased the price limits and the level of the minimum trading margin for the iron ore contracts in accordance with the measures for risk management, preventing and controlling the risks by the internationally accepted market-oriented means; in addition, in order to address the excessively increasing volume to open interest ratio of the iron ore futures recently, prevent the potential risks caused by the overheated trading in the market, and guide the rational investment of the investors, DCE has decided to cancel the discount for the intra-day trading fee of the futures from March 14.
The spokesman also said that in the next step, DCE would continue to strengthen market supervision according to the rules, constantly intensify the monitoring and supervision over the market, enhance the market inspections, more severely investigate and crack down on the transaction behavior violating laws and regulations, safeguard the sound market order, effectively prevent and control risks, ensure the safe and steady operation and functioning of the market, better serve the industries and the real economy, and make contributions to the structural reform on the supply side and the de-capacity, transformation and upgrading of the iron and steel and other industries. He also hoped that the futures company members could play a pioneering role in preventing and controlling risks, guide the clients in rational and compliance participation in futures investment, and jointly safeguard the sound order of the market.
