On June 4, the "2019 Iron Ore International Market Seminar", hosted by the China Chamber of Commerce for Metals, Minerals and Chemicals Importers and Exporters and specially supported by GMEI, was held in Qingdao. Wang Yufei, deputy general manager of DMS, said in his speech at the meeting that the launch of iron ore options and scrap futures should be accelerated to continuously enrich the hedging chain of China's steel industry.
China is the world's largest importer and trading country of iron ore, iron ore external dependence of more than 80%, international iron ore price fluctuations are prone to direct impact on the domestic steel industry. The current global political and economic landscape is undergoing profound adjustments, affecting the price of iron ore instability, uncertainty is still a lot of factors, how to hedge the risk of iron ore price fluctuations, to promote the high-quality development of China's steel industry, the more necessary and urgent.
Wang Yufei said, in recent years, the big business institute has always continued to explore innovative paths to serve the steel industry, and the ability to serve the real economy has been continuously enhanced. Since the listing of iron ore futures in October 2013, the market has been operating in an overall smooth and orderly manner, with the market functioning well and the international influence steadily expanding. Since this year, the unilateral daily average turnover of iron ore futures has been more than 1 million lots, with an average daily position of 770,000 lots and a 47% share of positions held by corporate clients, an increase of 10% over the same period last year. In particular, since the introduction of foreign traders, iron ore futures have attracted investors from 14 countries and regions to open accounts, 41 foreign brokerage institutions have participated in business mandates, and some foreign clients have started to use iron ore futures prices for trade pricing. More and more industrial enterprises are using the iron ore futures market to manage the risk of price fluctuations. For a long time, the correlation between iron ore futures prices and Platts Index, Singapore Exchange swap prices and spot prices has remained above 0.95, and the market hedging efficiency has remained at around 80%. At the same time, the path of the Institute to serve steel enterprises continue to innovate, in recent years to support the development of 13 iron ore over-the-counter options pilot project and 8 iron ore basis trade pilot project, a powerful service to steel enterprises personalized, diversified risk management needs.
Wang Yufei said, this year, by Brazil's Vale dam collapse to reduce production, Australia hurricanes, China and the United States trade friction and global iron ore industry chain adjustment and other multiple factors, iron ore prices have risen rapidly, causing high concern. The Institute closely tracked, monitored and analysed the market situation, and took the initiative to adopt a series of measures such as risk alert, upward adjustment of commission, strengthening market surveillance and public opinion prevention and control, etc. to firmly maintain the stable operation of the iron ore futures market. She said that DMS will firmly promote the opening up of the futures market to the outside world and accelerate the international pricing capability of China's iron ore futures market. At the same time, it will increase product supply, accelerate the launch of iron ore options and scrap futures, continue to deepen the basis trade and commodity swap business, and continuously enrich the risk-averse chain of China's steel industry. We hope that the backbone of China's steel industry will participate deeply in the futures market for risk management, and also actively participate in the construction of an international pricing centre for iron ore.

