Notice on Iron ore traders, Dalian Commodity Exchange remind delivery and other related matters for I2009

Fang • submitted 2020-08-24 17:08:05

On Aug 21st, DCE has issued a notice on "delivery and other related matters of I2009”, requires members remind customers of rational and compliant transactions, to ensure smooth delivery of I2009 and stable operation of the market.

Notice indicates that the last trading day of I2009 contract is September 14, and the final delivery date is September 17. According to article 6 of the Delivery Management Method of Dalian Commodity Exchange, positions held by individual customers and non-deliverable iron ore units at integer times shall not be delivered. According to article 29 of the Dalian Commodity Exchange risk management measures, member I2009 contract of futures companies and clients’delivery month position limits is 2000 lots, and the position for individual clients is zero in the delivery month. The notice remind the member companies pay close attention to I2009 trading contract customers, accurately grasp the customer's position, reminding customers of rational and compliant transactions and orderly in and out of the market, to ensure the stable of the market.

According to market participants, as a rule, DCE will issue a“month-end Notice” through the exchange's official website every month close to the end of the month, regarding the margin, price limit, position limit, and non-delivery of individual customer positions after each contract enters the delivery month, reiterate and remind members and investors to prevent and control risks. The reminder for the I2009 contract this time reflects DCE's great emphasis on the smooth operation and smooth delivery of the I2009 contract at present and after entering the delivery month. It also reflects the exchange's further prevention and control of risks, ensuring the successful conclusion of the I2009 contract, and thinking of sticking to the market and the bottom line of risk prevention.

A reporter from the Futures Daily learned that in order to maintain the smooth operation of the iron ore futures market and ensure the functioning of the market, in recent months, DCE has successively issued two market risk warning letters, implemented transaction limits, and increased two deliverables brand, which will further expand the available delivery resources and other measures, and study to increase the designated delivery warehouse to strengthen market risk prevention and control, and enhance market service capabilities. Judging from the current market operation, the iron ore futures including the I2009 contract are operating safely and steadily. With the rolling of the main contract, the I2009 contract holdings have steadily declined recently.

According to market participants, according to the rules, starting from the settlement on August 20, the position limit of I2009 contract non-futures company members and customers has been reduced from the original 10% position limit to 6000 lots, until the closing of I2009 contract on August 21, the open interest has been reduced to 141,900 lots. After entering the delivery month, as the position limit of non-futures company members and customers is further reduced to 2,000 lots, the position limit of individual customers is zero, and the positions of non-delivery units cannot be delivered, the I2009 contract positions will be further reduced in an orderly manner. Correspondingly, the iron ore stocks that can be delivered at the port are sufficient, which can guarantee and realize the smooth operation and final delivery of the I2009 contract after the delivery month.

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author: Fang

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