DCE adjusts iron ore futures trading limits and optimizes market structure
On August 4, DCE issued the "Notice on Implementation of Trading Limits for Iron Ore Futures I2009 Contracts and I2101 Contracts", and decided to start trading on August 5, 2020 (that is, the night trading session on August 4) , Adjust the trading limit of iron ore futures varieties to be implemented in the iron ore futures I2009 contract and I2101 contract. Market participants said that the adjustment of the trading limit measures will further optimize the structure of the iron ore futures market on the basis of preventing market risks and stabilizing market operations, and better serve steel companies to participate in market management risks.
According to the notice, non-members of futures companies or clients shall not open more than 15,000 lots and 10,000 lots on iron ore futures I2009 and I2101 contracts in a single day. The single-day open position refers to the sum of the number of open positions for buying and selling on the iron ore futures contract on that day by non-futures company members or clients. The number of open positions for hedging transactions and market making transactions is not limited. Accounts with actual control relationships are managed as one account. The exchange may adjust the trading limit according to market conditions.
Market participants believe that the DCE has adjusted the trading limit on iron ore varieties to differentiated trading limit measures for I2009 and I2101 contracts, and clarified that the open positions of hedging transactions and market making transactions are off restricted, on the one hand, it has further strengthened the risk prevention and control of the iron ore futures market, on the other hand, it has adopted precise management of the I2009 contract and I2101 contract to move futures trading to non-January, non-May, and non-September contracts. It will undoubtedly further promote the active continuity of iron ore futures contracts and optimize the market structure on the basis of maintaining the smooth operation of the market, so as to better promote the functioning of the market.
It is understood that in the near future, DCE has continued to strengthen market risk prevention and control on the one hand, and on the other hand, it has started with improving the continuity of active contracts for major products and optimizing the delivery business to improve its industrial service capabilities. In terms of improving the contract continuity of major futures varieties, DCE has launched a number of measures, including optimizing the iron ore futures market-making plan, increasing the number of market makers for iron ore and other futures, and adding parts to iron ore varieties. Inter-period arbitrage contracts related to non-January, non-May, and non-September contracts, and the introduction of a market maker system in eight futures varieties including coking coal and coke, to achieve full coverage of the market-making business in major varieties. Through the above measures, the continuity of related futures contracts, including iron ore futures, has been improved recently, and the quality of market operations has continued to improve. In terms of optimizing the delivery business, DCE will continue to improve the delivery system, expand the scope of iron ore delivery brands, increase deliverable resources, and timely adjust the delivery fee and storage fee to reduce delivery and warehouse receipt holding costs; at the same time, research to expand the scope of delivery factories and warehouses, attract industrial enterprises to deeply participate in the futures trading delivery business, and provide in-depth services for the steel industry to manage risks.
Market participants believe that the implementation and planning of the above-mentioned measures are expected to further optimize the structure of the iron ore futures market and improve the quality of market operations, thereby effectively promoting the function of the futures market and better serving steel companies to use derivatives.