I'm not certain I understand your question. For a general "how...

I'm not certain I understand your question. For a general "how do futures work?" you could start with rvm's link.

But I think you're more interested in iron ore futures specifically so I think you have to start with the Dalian Commodities Exchange.

I think the answer to your question is under the Education > Clearing Services tabs where Physical Delivery is described. Ie at the Dalian Commodities Exchange English website.

I am not an expert either. But I recognize that to understand what Dalian future's prices mean for predictive purposes it would be better to understand how the system works.

That the use of a futures market affects share prices (in a downward direction mostly by empowering the buy-side) I infer from Nevil Powers comments which included the observations that futures (the Dalian) were relatively new, and that the value of iron ore futures exchanged in april were as much as the value of iron ore traded into china in the whole year.