China's Dalian Commodity Exchange is now welcoming overseas dealers into its iron ore futures. The move follows the debut of China's crude oil futures last month — another initiative in opening up markets while having more of a say in pricing commodities. However, the most actively traded September iron ore contract was down about 1.7 percent, hovering around at 470 yuan -- or 74 US dollars -- a tonne during the morning trading hours. That followed a two-day spike that pushed the contract to its highest level in more than a week on Thursday. GGTN reporter Xu Xinchen went to the launch ceremony and has this report.

XU XINCHEN DALIAN China's iron ore futures are now officially global — allowing overseas traders to participate in contracts dated September this year and onwards. Overseas traders can 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.

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. The General Manager for the Dalian Commodity Exchange, Wang Fenghai, said that the operation for China's domestic iron ore futures has been smooth since their initial listings five years ago, and he believes an internationalized iron ore futures market in China could help develop a price benchmark reflecting global supply and demand. Dalian's iron ore futures are already one of the world's top ten actively traded futures contracts, but foreign companies I spoke with including JPMorgan said that opening up to global traders means ironing out kinks like currency conversion and delivery issues. In addition, more consolidation in the steel industry is also needed to gain more pricing power of the raw material. Xu Xinchen, CGTN, Dalian, Liaoning Province.