Iron-ore and thermal-coal swaps make debut

Yuan-denominated iron ore and thermal-coal swaps debuted on Monday in Shanghai as China, the biggest user of raw materials, races to become a global center for commodities trading.

The swaps, which are monthly, quarterly and yearly contracts, will complete the range of ore and coal derivatives currently available in China, according to the bourse. Iron ore futures and some steel products futures already exist in Dalian and Shanghai. Zhengzhou started thermal-coal futures in September last year.

The introduction of yuan-denominated swaps, similar to index-based contracts priced in dollars on Singapore Exchange Ltd, reflects China's efforts to boost domestic trading and exert more influence on the global market for iron ore and coal. The trade may also allow Chinese steelmakers to better manage risks through hedging, said Ma Kai, an analyst at China International Capital Corp.