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New iron ore trading platform launched in China with seven trades

  • Tuesday, June 23, 2020
  • Source:ferro-alloys.com

  • Keywords:China, Hebei Iron & Steel
[Fellow]New iron ore trading platform launched in China with seven trades

[ferro-alloys.com]A new physical trading platform for iron ore in China, started by Heibei Iron and Steel Group on June 22, concluded seven trades on the first day.

The platform, dubbed HBIS International Ore Supermarket, runs in parallel with the existing COREX physical iron ore trading platform, on the COREX website.

As of 5:30 PM Singapore time, three seaborne trades totaling 445,000 mt and four portside trades of 36,500 mt were concluded, with 15 offers of ~446,500 mt and one bid of 170,000 mt live.

The distinguishing feature of Ore Supermarket is that unlike the existing trading platforms, such as COREX and globalORE, where a bid or an offer is open to selected counter-parties as determined by the buyer or seller, a bid or offer on Ore Supermarket is open to all companies that have registered and sought approval from HBIS to obtain a trading account. "There are currently a few hundred companies who can trade on Ore Supermarket. Over 100 are for portside trades. The rest can trade both at the ports and on the seaborne market," a source familiar with the matter said.

Also, according to the source, unlike COREX and globalORE where a trade is a bilateral contract between a buyer and a seller, HBIS will back all the trades concluded on Ore Supermarket. If a party defaults on a trade, HBIS will guarantee the settlement of the trade with the counter-party. "The [successful] applicants [for a trading account] are vetted by HBIS and categorized into eight tiers based on criteria such as their registered capital and [historical] trading volumes. [So far] the companies with a trading account on Ore Supermarket are regular customers or suppliers of HBIS," the source said.

According to HBIS, the purpose of launching Ore Supermarket is to "provide a public, transparent and safe third-party platform." Two types of trades can take place on Ore Supermarket. The first is where HBIS acts as the seller or buyer of the trades. The second type involves HBIS acting as an intermediary between the buyer and seller, providing a clearing function. For the second type of trades, HBIS will charge a transaction fee and if the trade is a portside pre-sale trade, buyers and sellers may also need to pay a margin as a performance guarantee, a trader said.

(S&P Global Platts)

  • [Editor:王可]

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