.jpg)
Recently, Dalian Commodity Exchange (DCE) held a discussion meeting on the iron ore futures in Qingdao. The DCE R & D team of the iron ore futures briefed the meeting comprehensively on the contracts rules of the iron ore futures, including the design basis for the trading units and the smallest price change, the actual checks for the design of the trading quality standards, the guidelines for the design of the bill of lading delivery system, and so on. The experts from the information research institutions such as the Metallurgical Industry Development Research Center, Shougang Group, Hebei Iron and Steel Group, Shagang Group, Sinosteel Trading, Cargill, BHP Billiton and Steelhome.cn carried out in-depth discussions on the details of the contracts and rules of the iron ore futures.
The professionals of DCE briefed the meeting comprehensively on the guidelines for the design of the iron ore futures. The delivery sites of the iron ore have been set in the six major ports in the Bohai Sea Rim region including Lianyungang, Rizhao, Qingdao, Tianjin, Jingtang Port and Caofeidian with the factory warehouses set in the inland of Tangshan, Rizhao and Lianyungang Port. Considering the spread between the six ports, premiums and discounts are not set at the delivery sites. With regard to the bill of lading delivery system widely concerned by the market, the contracts designers said that the in-depth study of iron ore logistics system shows that bill of lading delivery system significantly saves the costs of delivery, including storage charges, port surcharges, time, funds and so on. By means of the bill of lading delivery，the purchasers may receive the goods at the desired sites, so as to substantially reduce the costs of logistics and receiving the goods. In comparison with the traditional warehouse receipt delivery, the sellers may get the payment of goods in advance because of applying for delivery earlier, thus saving the financial costs.
According to the sources, the iron ore futures include the mainstream ores on the market into the delivery system, the prices are representative, and there is a wide range of products for delivery with the estimates amounting to more than 400 million tons of iron ore. An upper limit has been set for every indicator of the standard products of iron ore, so as to ensure that the quality of the goods received by the purchasers is controllable. In order to scientifically set the quality standards of the iron ore, the DCE has worked with the inspection institutions to base the setting of every indicator and the standards of premiums and discounts on a large number of inspection reports, totaling more than 1,700.
At the meeting, the honored guests spoke highly of DCE’s contract rules of the iron ore futures. Wang Junjie, chief accountant of the Mining Co., Ltd. of Hebei Iron and Steel Group, said, “The contracts design and the standards of the premiums and discounts of the iron ore futures meet the current provisions of prices. The listing of the iron ore futures will provide a supportive platform for the enterprises strengthening the management of procurement and production.” Qian Jin, vice president of Sinosteel Trade Co., Ltd., expressed his full confidence in DCE’s contracts rules of the iron ore futures, vowing to engage in the hedging trade after the listing of the iron ore futures in the case of huge risks. Wu Wenzhang, president of Shanghai Steelhome Information Technology Co., Ltd., said that the listing of the iron ore futures has been concerned globally, DCE has made many efforts in innovation, and the innovation in the bill of lading delivery will help save costs and stabilize the market. In addition, the formulation of China iron ore quality standard is conducive to the unification of the industry standards. It is learnt that before the discussion meeting, DCE has conducted much survey and research, organized many demonstrations in the industry, considered the usual practices of the spot trade and fully listened to the opinions of the mines and the iron and steel industry.
At the meeting, the attending guests thoroughly compared notes with the R & D team of DCE on the setting of premiums and discounts of the iron ore, the details of the operation of the bill of lading system, the scale of position limits and other issues. Some industrial attendees hoped that after the listing of the iron ore futures, DCE could constantly organize the trainings for the industry so that the relevant industrial enterprises could raise awareness of the contracts rules of the iron ore futures.
