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China for iron ore pricing can not rely on the internal transaction size is more important

Date:2016-10-24 22:01:03 Visits:

The Dalian Mercantile Exchange, China's iron ore futures trading scale is 20 times more than the Singapore Exchange, but Goldman pointed out that the size of the transaction does not determine the Chinese election have iron ore pricing, more instead, changes of the small size of the transaction of the Singapore daily iron ore prices continued to affect the dce. This is why?

Iron ore pricing power

Although iron ore futures began trading in 2009, but the volume growth is very rapid. 2016, iron ore futures average daily turnover of 7 billion U.S. dollars, equivalent to the New York commodity exchange (NYMEX) WTI day trading volume of 20%, iron ore has become an important investment products on the market. As the world's largest iron ore consumer, has been China for iron ore pricing in order to break the foreign monopoly index so as to change the situation, the steel industry in the end China cost of heteronomy.

Goldman Sachs believes that compared to the DCE, more in the new institutional investors, and individual speculators less, this may explain why little correlation between DCE and the huge trading volume pricing. In SGX, institutional investors 90% of the transaction, but individual investors dominated the DCE 70% transactions. Therefore, the transaction in the big business turnover rate is far higher than the sgx.

However, despite the overall impact of the big business is new Suoxun color, but Goldman observed when stabilize or iron ore prices rose sharply when the DCE's influence has a rising trend. This may be related to a lot of domestic investors have stronger speculation.

This year, the big business of iron ore futures prices rose 38%. Driven by speculative trading, this year 3, April, the domestic iron ore futures soared. Big business has taken a series of measures, including the "cool" to improve the variety of contract price limits, increase the minimum trading margin, cancel open fee concessions, to prevent potential risks. In August September, iron ore futures contract business again soaring, topped the April speculative boom climb the top of the record closing high.

Improve the expected demand, a large number of China investors into the commodities futures market in the beginning of the year, but Bloomberg quoted the Australian miner FortescueMetalsGroup believes that such a high level of speculative trading is not healthy.

The industry believes that, by contrast, do the "winter" to prepare the occasion in mining enterprises, Chinese iron and steel industry in the fight for the right to speak, the more practice skills, starting from resolving overcapacity, improve the efficiency, to deal with the "winter".