Iron ore refers to the ore containing iron element or iron compound with utilization value, which is almost only used as raw material for steel production. Steel is the pillar industry of the national economy. Iron ore is the most important raw material for steel production. It takes about 1.6 tons of iron ore to produce 1 ton of pig iron. Iron ore accounts for more than 60% of the cost of pig iron. It can be seen that iron ore is also an important raw material closely related to the national economy.

According to different physical forms, iron ore is divided into raw ore, lump ore, fine ore, concentrate, sinter, pellet, etc. Lump ore is high grade ore that can be directly fed into furnace; Powder ore and concentrate can be put into the blast furnace only after artificial agglomeration. Powder ore is the main raw material for producing sinter, and concentrate is the main raw material for producing pellets. Based on the demand of the spot market, the subject matter of iron ore futures trading is selected as fine ore.

In recent years, with the rapid development of China's steel industry, the demand for iron ore has increased significantly, driving the continuous growth of China's iron ore output. In 2001, China's raw ore output was 218 million tons, and then increased year by year. By 2005, China's raw iron ore output reached 420 million tons, a year-on-year increase of 35.6%, almost double the output of 2001. According to statistics, China is currently the world's largest consumer, importer and second largest producer of iron ore. In 2012, China's raw iron ore output was 1.31 billion tons, equivalent to 440 million tons of concentrate; The consumption of iron ore is about 1.05 billion tons, and the import volume is 740 million tons.

In recent years, the annual negotiation pricing system of iron ore has collapsed, trade pricing follows the market, price fluctuations are frequent and intense, and enterprises have strong demand for hedging. Since 2010, the price has fluctuated between 600 yuan/ton and 1400 yuan/ton, with the maximum fluctuation exceeding 700 yuan/ton. The maximum increase in the year exceeded 70%, and the maximum decrease was nearly 40%. Dalian Commodity Exchange [Weibo] In line with the trend of iron ore financialization, the introduction of iron ore futures trading will help spot enterprises manage the risk of market price fluctuations, promote the improvement of iron ore pricing system, and lay the foundation for China to seek international trade pricing power in the future.