Starting August 1 Dalian Commodity Exchange (DCE) will temporarily waive the delivery commissions of all futures contracts until next March 31, according to a DCE notice published on July 15.
“It is decided that the delivery commissions of all futures (including the commissions of exchange for physicals of standard warehouse receipts) will be waived from August 1 2020 to March 31 2021,” the Liaoning-based exchange in Northeast China said in the notice.
Currently, the delivery commission on iron ore futures, for example, is Yuan 0.5/tonne ($0.07/t), Mysteel Global notes.
“The temporary waiver can be regarded as a preferential policy from DCE to encourage delivery, but for the iron ore futures market generally, the impact might be limited,” an iron ore analyst with a futures company in South China’s Fujian province commented.
An iron ore trader in South China noted that the exchange’s move would help reduce the cost of buying and selling, and could lead to iron ore futures prices better reflecting spot market trends and thus, enhance the price discovery function of futures.
Currently, the Dalian exchange’s listed futures products for the steel industry include iron ore, coke and coking coal, while the exchange intends to launch a ferrous scrap contract within this year, as Mysteel Global has reported.
On July 15, DCE’s most-traded iron ore contract for September delivery closed at Yuan 837/dmt when the daytime trading session ended, higher by Yuan 4.5/dmt from the previous day’s settlement price.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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