China Minerals and Chemicals Association on August 11 issued a statement to remind its members whether in or outside the territory as much as possible to avoid the creation of investment banks to participate in the swap transactions of iron ore.
Chamber of Commerce, said the higher risk of swap transactions, glue stick compared to the traditional floor trading, market information disclosure to a lesser extent, more difficult for market participants to assess their counterparty credit risk.glue gun In addition to protection by the Exchange floor trading performance of both parties However, no such system to protect the OTC.
CreditSuisseandDeutscheBank earlier this year for iron ore OTC swap transactions, the settlement price due under the contract announced in India on the CIF value ore to China.
One Chinese trader said the Chinese government is opposed to iron ore spot price index, while strongly maintaining long-term agreement mechanism. But the OTC price index will stimulate the demand on the spot.
"There are not many companies involved, the amount is not large, but this situation may gradually change, the Government will be worried," he said.
China Steel Association has repeatedly expressed opposition to the iron ore spot index, saying it violates the principle of supply and demand determines the price.