Volatile prices, win­ter freeze may cut vol­umes on top China iron ore trad­ing plat­form

Global Times - - Biz Markets -

China’s largest phys­i­cal iron ore trad­ing plat­form ex­pects its trade vol­umes, af­fected this year by volatile prices for the steel­mak­ing com­mod­ity, to re­cover in 2018 and reach 100 mil­lion tons in the next five years, its pres­i­dent said.

Vol­ume traded on the Beijing Iron Ore Trad­ing Cen­ter Corp (COREX) could breach 30 mil­lion tons this year, said You Song, but may be lower than the 35.35 mil­lion tons recorded in 2016.

“Trad­ing was more ac­tive when prices went up... and traders nor­mally hold their steps when prices fall,” You said.

Iron ore for Jan­uary de­liv­ery on the Dalian ex­change had tum­bled as much as 4.27 per­cent to 448 yuan per ($64) ton dur­ing afternoon trad­ing on Thurs­day.

“Iron ore fun­da­men­tals are not good,” said Zhao Xiaobo of Si­nos­teel Fu­tures in Beijing. “Im­ports will rise in the fourth quar­ter and the en­vi­ron­men­tal re­stric­tions on steel mills are re­duc­ing iron ore de­mand.”

Planned steel pro­duc­tion cuts in China dur­ing win­ter may also re­duce trad­ing vol­umes, You said.

Chi­nese steel mills will face out­put curbs of as much as 50 per­cent from Novem­ber through March as part of the Chi­nese govern­ment’s war against air pol­lu­tion.

“The en­vi­ron­men­tal in­spec­tion and out­put cut­backs in win­ter may have some im­pact on iron ore trade vol­umes,” said You.

But he said he was con­fi­dent that trad­ing vol­umes at COREX would rise to 40 mil­lion tons in 2018 and to 100 mil­lion tons over the next five years, with its mem­ber­ship widen­ing and with global min­ers likely to in­crease trans­ac­tions via the plat­form.

COREX, where car­goes from top iron ore sup­pli­ers Vale, Rio Tinto and BHP Bil­li­ton are among those chang­ing hands, is con­sid­er­ing in­clud­ing more prod­ucts such as cok­ing coal and cop­per.

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