China opens iron ore market to the world in pricing

Reuters reports the latest headlines, citing that China opens trade in Dalian iron ore futures to foreign investors from today. The move is mainly aimed to boost its pricing clout for one of its top imports.

Key Highlights:

“Iron ore is the second commodity China is opening to outside investors after launching crude oil futures in late March. Unlike crude oil, though, the iron ore contract on the Dalian Commodity Exchange (DCE) - launched in 2013 - has a deep pool of liquidity and major Western traders have already had access through local Chinese entities.

Twenty-one foreign trading agencies have so far registered at the DCE, according to the China Securities Journal, the official publication of China’s top securities regulator, although the DCE has declined to name the agencies.

The move should also boost arbitrage opportunities between Dalian and Singapore, said William Chin, head of commodities at the Singapore Exchange.”