SHANGHAI Oct 11 China's Dalian Commodity
Exchange said on Tuesday it will cut fees warehouses charges for
delays loading out iron ore from warehouses in its network
following complaints from traders who are taking physical
The exchange, which operates the world's biggest iron ore
futures contract, will cut the charges for contracts starting
from March 2017.
Delays can occur when trucks are used to take delivery of
iron ore from storage facilities, leading to distortions between
the physical and the spot prices of iron ore.
There are not the same problems when shipping iron ore by
water, the exchange said, without giving further details.
In a further effort to boost liquidity, the exchange is also
considering adjusting the upward limit of delivery fees in and
out of warehouses, it said.
The exchange did not give a comparison for delay charges,
but the new fee would be 0.1 yuan a tonne per day within 19 days
after the cancellation of warrants, to be raised to 0.5 yuan
beyond 19 days.
While the Dalian wait times are unlikely to be as serious as
those that dogged the London Metal Exchange (LME) for years, the
steps the Chinese exchange is taking to ease users' concerns are
similar to those taken by the LME.
Beverage can makers have complained that LME warehouse
companies have been using unfair tactics to postpone delivering
aluminium from storage facilities to boost profits from rent.
In some cases, wait times for aluminium were as long as two
years, inflating the physical prices for the light metal and
disrupting supplies. The issue drew scrutiny from U.S. and
To placate users' concerns, curb warehouse games and restore
confidence in its global market, the LME said last month it
would cap rent and load-out charges across its more than 600
Since launching iron ore futures three years ago,
the Dalian contracts have grown increasingly popular, overtaking
a rival contract on the Singapore Exchange by volume.
Costs of futures trading have captured attention in recent
years as competition has intensified between exchanges like CME
and Shanghai Futures Exchange and turnover has dropped.
In 2015, the LME, owned by the Hong Kong Exchanges and
Clearing Ltd, hiked some fees, but it reversed the
increase in August after strong criticism from brokers.
(Reporting by Ruby Lian and Josephine Mason; Editing by Tom