Understanding Dalian futures

From UBS:

Section 1: The DCE under close examination DCE history The world’s first commodity markets arose from agricultural practices that date back to as early as 17th century Japan. Since, these early days the market has rapidly expanded and changed in nature incorporating a greater range of commodities worldwide. Dalian is a city of 6.7 million people in northeast China situated on the Yellow Sea. The Dalian Commodity Exchange was founded in 1992, with the city’s excellent access to rails and roads making it perfect for central distribution. It is one of four futures exchanges under the supervision of the China Securities Regulatory Commission (CSRC) and is a non-profit, self-regulating entity. By the end of 2013, 21 years after its origination, the DCE had emerged as a leading market force with 173 member companies, 180 delivery warehouses and 1,776,307 investor accounts. In 2016 alone DCE achieved 3 billion contracts up 38% from 2015 and was ranked 8th out of the leading global derivatives exchanges by the Futures Industry Association. The rapid expansion of DCE is displayed in the graph below, with strong growth evidenced in recent years.

While the Dalian initially focused on agricultural commodities it is expanding into the industrial sector with the introduction of coking coal and iron ore futures to their portfolio in 2013. Iron ore futures have grown rapidly accounting for 23% of total contracts in 2016. Other well traded industrial materials include hard coking coal, coke, PVC and polypropylene. The DCE has contributed to the building of a regional financial centre, revitalising northeast China. The “Plan of revitalizing Northeast China” approved by State Council in 2007 shows the areas commitment to the commodity exchange market by stating that efforts should be made to support futures trading in Asia making full use of DCE in order to prompt growth and development in Dalian.