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OTC market service entity,Iron ore futures warehouse receipt service provider completed 20,000 tons of transactions

Fang submitted 2018-10-12 11:04:43

OTC market service entity,Iron ore futures warehouse receipt service provider completed 20,000 tons of transactions

On October 9, 2018, Shaanxi West Coal Products Co., Ltd. ("West Coal Products") and Shandong Huaxin Industry and Trade Co., Ltd. ("Shandong Huaxin") passed Changan Futures and Galaxy Futures respectively, in the DCE integrated business platform. Completed the settlement of 20,000 tons of iron ore warehouse receipts and the transfer of relevant payment.

According to reports, West Coal Products is affiliated to the Shaanxi Coal Group, and iron ore trade began in May this year. As a futures buyer's client, West Coal Property participated in the delivery of I1809, and the delivery settlement price was 488.5 yuan/ton. After the delivery pairing, the West Coal property received 20,000 tons of Rizhao port warehouse receipts, and the corresponding mineral is Indian Fines. Since its target client use Indian Fines less frequently, West Coal Properties decided to sell locally. West Coal, which has just been engaged in iron ore trading and has limited sales channels in Rizhao, has locked its sales approach in the DCE iron ore warehouse receipt service business. On September 27th, West Coal Property submitted an application for the sale of warehouse receipts. The price of the warehouse receipts on that day was 485 yuan/ton, and 5 service providers in Rizhao District responded promptly on the same day. According to the warehouse receipt service provider system, the exchange sorts and completes the matching of the service providers according to the principle of low service fee priority and time priority. Finally, Shandong Huaxin won the business with a service fee of 8.5 yuan / ton.

Gao Wei, chairman of West Coal Products, said that West Coal has attached great importance to the iron ore warehouse receipt service and has organized employees to conduct in-depth study. If the traditional spot sales are taken this time, considering the factors such as futures premiums and delivery costs, the warehouse order price is expected to be 430 yuan / ton. The sales price through the warehouse receipt service, after deducting the service fee and related storage fees, is about 475 yuan / ton, which is equivalent to a reduction of 45 yuan / ton, about 9% of the value of the iron ore cargo.

As a DCE iron ore delivery factory warehouse and warehouse receipt service provider, Shandong Huaxin actively responds to client' applications for sales warehouse receipts. "With the broad advantage of the spot channel in Rizhao, Shandong Huaxin found the counterparty on the day of matching, and obtained a profit of RMB 5/ton after deducting the delivery and other expenses. In the service of client, they have obtained certain benefits and achieved multi-party win-win. "Lu Zhaohui, general manager of Shandong Huaxin said.

The reporter learned that at present, client and service providers participating in the OTC market are required to go through the futures company. Changan Futures is the seller service agency of the warehouse receipt business, and Galaxy Futures is the buyer service agency for the warehouse receipt business. Wang Rui, chairman of Changan Futures, pointed out that the iron ore warehouse receipt service can better meet the needs of the entity, which is conducive to the futures company to better serve the entity. The relevant persons of Galaxy Futures stated that Galaxy Futures has repeatedly bid for iron ore warehouse receipts for the service providers represented by the agency. This business is conducive to opening up futures and spot docking channels and providing more services to the physical industry through the OTC market.

It is reported that as an important measure for the construction of the OTC market, the iron ore futures warehouse receipt service provider system was launched in May 2017. The client can buy and sell warehouse receipts at the expected cost, effectively improve the ability of client to deliver, and promote the spot market docking and improve the continuity of futures contracts. Since the launch, the iron ore warehouse receipt service business has operated smoothly, with a total settlement of 150,000 tons in 2017, accounting for 20% of the delivery volume of the year. Relevant persons of DCE said that they will continue to promote the iron ore warehouse receipt service business in the future, and further strengthen the construction of the OTC derivatives market to meet the individual needs of the entity.


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