China's Dalian Commodity Exchange has started introducing overseas dealers into its iron ore futures. Friday's move follows the debut last month of China's crude oil futures — another initiative in opening up markets. Xu Xinchen reports.

China's iron ore futures are now officially global — allowing overseas traders to participate in contracts dated September this year and onwards. As the world's largest iron ore importer -- China's impact on global prices so far has been limited. The Platts Iron Ore Index determines the prices. While the index considers bids and offers from some "widely-traded brands" to assess its spot market value for the raw material, it is not based on publicly traded prices.

WANG FENGHAI, GM DALIAN COMMODITY EXCHANGE "China imports a huge amount of iron ore, but prices are not set with a fair and transparent mechanism."

Wang Fenghai, the General Manager for the Dalian Commodity Exchange, believes an internationalized iron ore futures market in China could help develop a price benchmark reflecting global supply and demand.

WANG FENGHAI, GM DALIAN COMMODITY EXCHANGE "China's domestic iron ore futures have been listed for five years with smooth operation and prices becoming accepted by the industry. We are inviting overseas traders now to increase the global influence of the iron ore futures."

XU XINCHEN DALIAN Overseas traders can now participate directly via Chinese futures companies or overseas brokers without going through the hassles of establishing a local firm to trade. While the contracts are Renminbi denominated, companies can put down deposits in US dollars.

ROCHELLE WEI, CEO JP MORGAN FUTURES CO LTD "The enormous opportunity for the Dalian Iron ore contract is that it will, over time, reduce the price disparity. And over the longer term the Dalian iron ore contract could evolve to become a viable reference for physical contracts."

Dalian's iron ore futures are already one of the world's top ten actively traded futures contracts, but opening up to global traders means ironing out kinks like currency conversion and delivery issues. More consolidation in the steel industry is also needed to gain more pricing power of the raw material. Xu Xinchen, CGTN, Dalian, Liaoning Province.