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PrintAs a manager at an iron ore trading company in Beijing, Wang Xiaojuan has seen how international trading has changed in the last five years.
The pricing mechanism for iron ore has changed from long-term contracts to quarterly pricing, and then to index pricing. The changes have meant more frequent fluctuations in prices and smaller profit margins for traditional traders. Hence, it is no wonder Wang's company began rolling out iron ore financial derivative products last year.
"(Trading of) iron ore derivatives is all in foreign countries, and the first test in a foreign country is the language barrier," Wang said.
Her company wants China to launch its own financial products so it can hedge against price risks.
Wang's company may yet get its wish because the government has been exploring the possibility. On October 12, the Industry Coordination Division of the National Development and Reform Commission (NDRC) held a meeting to discuss iron ore futures.
At the meeting, Li Zhongjuan, deputy director in charge of the iron and steel industry at the NDRC Industry Coordination Division, said that the conditions for pushing ahead were maturing. "Launching (futures) sooner would be better than later," she said.
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