BHP Billiton plans iron ore trading platform

BHP Billiton's promotion of "financialization of iron ore" has been painstaking. After pushing the pricing of iron ore from the long association to index pricing, BHP Billiton has started to set up a new iron ore spot trading platform in Singapore. The "Economic Information Daily" reporter learned from an authoritative personage of a steel mill that BHP Billiton recently frequently lobbied major domestic steel mills to join the trading platform.

This platform is called the global iron ore spot trading platform, which was established by globalC OAL. The biggest initiator is BHP Billiton, one of the three major mines. According to reports, the shareholder composition plan for this platform is 40% for steel mills, 40% for mines, and 20% for traders. The operation will adopt a membership system.

“Related ministries and associations are very concerned about this issue, but also conducted some investigations and discussions.” The above sources said that the current steel factory's attitude is very cautious, and did not promise to join the program, still learning and watching. On the one hand, it is due to lack of experience. On the other hand, it is worried that this platform will be manipulated by international financial speculators. The risk is huge.

After the negotiated long-term contract price model was abolished, quarterly pricing based on the iron ore index and monthly pricing became the main mode of cooperation between China's steel mills and the three major mines. At present, there are three major iron ore indexes in the world: the Platts Index, the TSI Index and the MB Index. Under the impetus of BHP Billiton, the Platts Index has become the reference standard. It is noteworthy that, in more than one year of operation, domestic institutions generally questioned the Platts Index because its price was subject to an inquiry, and the source of the collected data was not announced.

This will undoubtedly be the reason why BHP Billiton plans to build an iron ore spot trading platform. BHP Billiton said it hopes to establish such a spot trading platform. After a certain stage of development, it will form an iron ore index based on spot trading and eventually form an iron ore index that is internationally recognized.

"BHP Billiton's determination is very large." A person from the China Iron and Steel Association admitted to the "Economic Information Daily" reporter that since the cancellation of the long association and quarterly pricing in 2009, it has evolved into a flexible pricing model. Among the three major mines, BHP Billiton is promoting " The most radical one of financial iron ore. BHP Billiton has a large number of financial capital backers, and the evolution of iron ore into financial derivatives has been regarded as the best way to obtain long-term high returns.