Iron ore price, page-10489

Sure thing Mr Cow,

The simple answer
The first chart is the price of iron ore as traded in yuan on the Dalian Commodity Exchange, plus the volume each day (note how it increases dramatically in early August). The second chart is an iron ore derivative instrument (CNH100) mimicking the Dalian price of iron ore as traded by brokers IG Markets.

On both charts, the bars just represent the daily range of sales, and overall you get a picture of the price of iron ore going up and down over the weeks/months. The y-axis shows the price in Chinese yuan. When MIN made its offer in April, the price was about 440 yuan, whereas now it is about 500 (a 14% increase).

The more detailed answer

The Dalian is the common name for the Dalian Commodity Exchange (DCE) where, among other commodities, iron ore is traded. It is in the city of Dalian, China, from which it gets it name (doh!).

Dalian Commodity Exchange info: https://en.wikipedia.org/wiki/Dalian_Commodity_Exchange
Dalian charts: http://www.dce.com.cn/DCEENMO/Products0/Industrial20/Iron Ore/index.html

The key thing to understand about the Dalian chart is that in China they use red for green and green for red in charting (red is considered a lucky colour - think of all those big red banger fireworks they have for celebrations! - so a price going up is a good thing, hence the red for up). The colour reversal does your head in a bit, but best just to look at the bars in terms of whether they are pushing the price up or down compared to the previous day.

The Dalian is good for a quick look at where the price of iron ore is at and is readily accessible for anyone on the internet (link above). However, regular punters can't actually trade the Dalian. This must be done through commodity brokers which offer the ability to trade the vast majority of commodities through their own financial instruments which basically follow the commodity prices on the base exchanges.

I use IG Markets as a commodities broker (I trade gold, silver, copper and oil, but not iron ore as the spread is too high (i.e. brokerage) and liquidity can be dodgy at times). IG markets has a partnership with charting software ProRealTime (which is what I used to produce the annual iron ore chart in my previous post). ProRealTime is highly sophisticated charting software, with embedded deal tickets so you can trade straight from the chart screen (see below) which is essential for speedy FX and commodities trading (I don't actually use it for ASX trades, I open a full IG deal ticket).




The IG Markets iron ore price basically follows the Dalian, as shown by the comparison of the two charts below: similar but not the same. And the ProRealTime chart is much easier to read and manipulate.




Now, there are several other places where you can get iron ore prices from other indexes. For example the Iron Ore Market Index which tracks the 68% NYMEX traded Fe (currently $68.68 USD). This is a really good site for info on iron ore. It also gives a list of all ASX iron ore mining companies.

https://www.marketindex.com.au/iron-ore#faqs

There are other sites, such as Market Data Solutions, where you can get info on the other grades of iron ore (e.g. 58%) https://www.barchart.com/futures/quotes/J-M18

Cheers, GW