Posted on 15 Feb 2022
The Dalian Commodity Exchange (DCE), headquartered in Northeast China's Liaoning province, has advised members that it will raise some charges relating to iron ore futures from the night trading session of February 15. The DCE notice released late on February 11 also warned that supervision of all futures market participants will be strengthened further.
From Tuesday's night session, the intraday trading fee and non-intraday trading fee of iron ore futures contracts - for February, March, April and May deliveries - will be raised to 0.02% of the trading turnover, from 0.01% presently applied, the exchange advised.
Referring to many "uncertainties" affecting market operations recently, DCE warned that "all futures market participants are advised to conduct trading in a rational and compliant manner and must not fabricate or spread false information to disturb market trading order."
The exchange also noted that it will further strengthen market surveillance and rigorously investigate and punish all violations of laws and regulations without exception, to ensure the smooth operation of the market.
The Dalian exchange's latest move followed repeated warnings about commodity price speculation from the central government in response to the recent surge in iron ore prices, Mysteel Global observed.
Last week, the National Development and Reform Commission (NDRC) complained twice - on February 9 and late February 11 - about what it regarded as an unusual uptick in iron ore prices.
NDRC said that initially, it and the State Administration for Market Regulation (SAMR) would be holding discussions with related iron ore price information providers on the issue, as reported. These briefings would be followed by the dispatch of teams to jointly conduct market supervision surveys among related commodity exchanges and major iron ore ports across the country, aimed at strengthening supervision for both physical and futures markets and to crack down on any illegal operations,
Late last Friday, the China Iron and Steel Association (CISA) also reminded related companies across the entire industry chain to regulate their operations. CISA will continue to cooperate with relevant government departments for market monitoring, and would further enhance its market analysis, according to a CISA statement posted on its WeChat platform.
China's iron ore market has quickly responded, both to the DCE's tweaking of its trading regulations and to the central government's warnings. Mysteel Global notes that the most-traded iron ore contract on the DCE for May delivery had dropped further to close the daytime session at Yuan 776.5/dmt ($122.3/dmt), down another Yuan 57/dmt or 6.8% from last Friday's settlement price.
Prior to this, the contract had plunged to as low as Yuan 761.5/dmt during last Friday's night session, DCE data show.
Source:Mysteel Global
