At present, DCE's iron ore futures have become one of the areas where the industry's clients in the domestic futures market are more involved. According to public figures, the number of corporate clients engaging in the trading of iron ore futures in the first 10 months of 2017 increased by 182% over 2014. "Many domestic industry clients are concerned about and participate in the iron ore futures market and their transaction scale soon surpasses Singapore's iron ore swap market." Cai Yongzheng said that the price discovery function of iron ore futures has gradually become apparent and has become the domestic iron ore Trade pricing benchmark.
In his opinion, the price of futures is more open, transparent and continuous compared with the index pricing method of small sample inquiries, which is obtained through the trading of a large number of market participants, which can reflect the actual supply and demand changes in the spot ore market timely and accurately. Unlike the way the index quotes once a day, the futures market offers real-time prices for different contract months each day, which helps companies quote multiple times a day with reference to real-time price changes. At the same time, China's iron ore futures using physical delivery, the spot price convergence is better, since the listing of iron ore prices are as high as 0.99.
Talking about the impact of iron ore futures on market pricing, Xinhua United Metallurgical Group Purchasing Department Yin Shao Bo told reporters: "Futures to guide the spot purchase and pricing, has become the consensus of spot business. Many domestic steel prices, traders In the procurement of iron ore, usually the day after the close of the 15th commodity market price changes and changes as a pricing reference Platts editorial staff generally at about 17:00 on the spot business inquiry, at this time collected A considerable part of the transaction price is based on the futures price, therefore, in fact, China's iron ore futures have played a guiding role in the Platts Index. "
Data show that iron ore futures market 4 years, the Platts "rapid rise and fall slow down," the characteristics have changed. Specifically, the Platts Index and the rebar contract price of the main futures showed the same up trend, the ratio of the two rising and falling also gradually equal. From 2014 to the first half of 2017, starting from the price rise and start-up, the Platts averaged 0.33 days ahead of the rebar futures start-up point when the price went up and an average of 2.5 days earlier. Judging from the price rise and fall, both rose by an average of 0.98 and declined by 0.96 on average. In addition, when the price of rebar futures dropped after the listing of iron ore futures, the percentage decline of the Platts Index increased from 62% before listing to 74%, and the contrarian increase from 23% before listing to 23% Both the consistency of the price increase.
In the spot market, the average price of rebar (HRB400 20mm) in 2013 was around RMB 3,660 / t. Since then, rebar prices have undergone several rounds of adjustments, dropping below 2,000 yuan / tonne mark by the end of 2015. With the iron and steel industry pushing forward structural reforms on the supply side and recovery of downstream demand in 2016, the price of steel started to stabilize and rise. The first quarter of 2017, rebar (HRB400 20mm) national average price of 3633 yuan / ton, the basic return to the 2013 price level. In the first quarter of 2017, the Platts averaged US $ 86 / tonne, equivalent to 50% of the 2013 Platts.
"Compared with 2013, which was in the phase of rising steel prices, the iron ore price trend weakened in 2017 and the price trend really reflected the impact of domestic supply-side structural reforms on the steel industry." According to Cai Yongzheng, iron ore Futures prices play a leading role in the Platts Index, which significantly alleviated the negative "scissors difference" effect of the Platts Index on enterprises, and made the purchase of iron ore spot more calmly.
