China's first iron ore spot trading platform opened the market officially on Tuesday and had its first transaction of 165,000 tons several minutes after its opening in the morning.
The opening of the platform will not only help China to ensure a supply of the resources but also help create good order in the international iron ore market, said Su Bo, vice-minister of industry and information technology.
"The platform will have a positive impact on stabilizing iron ore prices, which is significant to the global spot trading market" he said.
As the biggest iron ore importer in the world, China accounts for about 60 percent of global trade in it. However, the country has weak influence over pricing, which creates problems for domestic steel mills and iron ore traders.
In order to create a fair and transparent spot iron ore trading environment and help the country to gain more power over iron ore pricing, the China Beijing International Mining Exchange launched the online platform together with the China Iron and Steel Association and the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters in January and has been testing it since then.
"The widely used Platts iron ore index is regarded with some skepticism as to its transparency and fairness by steel companies and iron ore traders from China, Japan and South Korea," said Wang Xiaoqi, vice-chairman of CISA.
He said the new platform will not allow financial organizations and banks to participate to avoid the speculation and will not trade iron ore derivatives either.
According to Wang, the platform has 152 companies as its members so far, 132 domestic and 30 foreign.
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