Iron Ore

  • Overview
  • Contract Specifications
  • Execution Fee

Iron ore is one of the biggest dry bulk commodities traded and shipped by volume. Iron Ore has traditionally been a physical market with annual benchmark pricing, however, the emergence of China as a major commodities player and increased global economic volatility has seen the annual pricing system breakdown and the market evolve towards spot trading and index-based trading.

The  growth of spot trading and index-based trading  in this huge market presents an opportunity for banks, traders, producers and consumers to manage price risk and exposure. In turn, the derivatives sector is now set for an explosive growth as players seek hedging tools to minimize risk from increasingly volatile prices.

Although still in an embryonic stage and the volumes are still substantially lower than the physical market, the year-on-year increase in the derivatives volume since the launch of these iron ore derivatives has been particularly encouraging and many expect the derivatives market to overtake the physical market volume in the near future.

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