New spot iron ore trading platform launched in Rizhao

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“There are already trades of Pilbara Blend fines and Newman fines showing up on the screen,” a source at the exchange told Steel First.

The platform, named International Iron Ore Exchange (IIOEX), was initially set up by three private iron ore traders in Shandong province in April 2009. It was closed down before it began trading after China Iron & Steel Assn (Cisa) strongly opposed it, saying it would promote speculation.

The move by the state-owned China Railway Materials Group (CRM) in taking a controlling stake in IIOEX in January boosted its prospects.

The platform looks to provide more transparency to the market and help develop a better pricing system, Chen Shaochun, president of IIOEX, said in an announcement on Tuesday.

Rizhao, a logistics hub and China’s largest iron ore import port, sees over 100 million tonnes of seaborne iron ore arrivals a year, which will encourage trading on the platform, Chen said.

The IIOEX provides its major shareholders, who are iron ore traders as well, a new way of trading the physical steelmaking raw material.

Its controlling shareholder CRM traded nearly 40 million tonnes of iron ore in 2012. Each of the three other major shareholders – Huaxin, Wanbao and Zhongrui – trades over 10 million tonnes of iron ore annually, according to the announcement.

IIOEX joins two other iron ore trading platforms that are currently in operation – the Cisa-backed China Beijing International Mining Exchange (CBMX), which began its operations in May 2012; and the Singapore-based Global Ore, which started up shortly after the launch of CBMX.

Among the deals transacted on the IIOEX on its first day were a 175,372-tonne cargo of Robe River fines that was sold at 815 yuan ($132) per tonne, a 10,000-tonne cargo of PB fines that was traded at 855 yuan ($138) per tonne at Lanshan port, and a 60,000-tonne cargo of Newman fines that changed hands at 1,020 yuan ($165) per tonne at Rizhao port.