Foreign investors will be allowed to buy Chinese iron-ore futures from May 4th, announced the China Securities Regulatory Commission on Friday, in another move designed to open up the country’s markets to the wider world.
Last month saw the issuance of the first yuan-denominated crude oil futures in Shanghai, which many interpreted as Beijing’s bid to have a greater influence over global oil pricing. The same will be expected for iron-ore futures, which if successful could provide a new local benchmark for the commodity, according to Caixin Global.
Guidelines set out by the Dalian Commodity Exchange, the only Chinese exchange selling iron ore futures, say foreign investors will be able to trade only through a futures-company member, although this could be on behalf of an overseas broker.
China imported 1.08 billion tons of iron ore in 2017, making it the world’s largest consumer of the metal. As such the market for iron ore future is also booming, with $2.72 trillion worth of futures contracts traded on the Dalian exchange last year.