Shanghai Clearing House launches core optimization in CNY Iron-ore Swap

Shanghai Clearing House (SHCH) has rolled out optimizations to its CNY Iron-ore Swap (CIS) business on key elements including underlying index, final settlement price, and contract tenor, aiming to better align with the market shifts and serve entity clients, according to the company's latest announcement.

Launched on November 25, the optimized CIS product is a cash-settled OTC commodity derivative that is priced, cleared, and settled entirely in Chinese Yuan, using the average of Mysteel portside spot prices for 60.8% PB fines in East China's Rizhao and Qingdao as the underlying index, as announced. SHCH provides central counterparty (CCP) clearing services for it.

Latest CIS contract elements

Product	CNY Iron-ore Swap
Abbreviation	CIS
Lot size	100 wet tonnes
Price unit	Chinese Yuan per wet tonne
Minimum price fluctuation	Chinese Yuan 0.01/wet tonne
Contract quantity	Y lots
Contract tenor	Consecuting 12 months including current contract month
Trading hours	Business day: 10:30-18:00 (GMT+8) Last trading day: 10:30-15:00 Note: Business day refers to Monday to Friday (except national holidays)
Last trading day	The last business day of current month
Last settlement day	The first business day following the last trading day
Daily settlement price	Based on the forward price published by SHCH
Final settlement price (Rounded to two decimal places)	The arithmetic average of Mysteel daily Qingdao and Rizhao Ports' spot price indices for 60.8% PB fines during the last five business days of the current month
Settlement mode	Cash settlement

Source: SHCH

On its launch day, SHCH processed 22 CIS transactions, clearing 4,000 monthly contracts (single-sided) for a total value of Yuan 315 million ($44.5 million), with contract tenors covering November and December 2025, as well as January and February 2026, according to SHCH statistics.

The optimization of SHCH's CIS product will enrich the risk management toolkit for participants engaging in seaborn or spot business while strengthening pricing power with the enhanced impact of Renminbi-denominated spot iron ore indices, according to the company.

SHCH started its CCP clearing service for CNY iron ore swap in 2014, with the benchmark price settled based on the prices of 62% imported iron ore fines published by Mysteel, Custeel, and Beijing Iron Ore Trading Center Corporation, Mysteel Global learned.

62% Fe grade iron ore has widely served as a pricing benchmark in the global iron ore market as it was the most-traded product in the past decade, but in recent years, 61% iron ore is emerging as the mainstream product amid changes in global iron ore resource availability, as Mysteel Global reported.

Written by Anthea Shi, shihui@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com