China, the world's second-largest economy and also the world's largest consumer of iron, in a bid to manipulate the global pricing of the raw commodity, is set to launch the first iron ore physical trading platform by yearend.
The China Beijing International Mining Exchange ( CBMX ) will launch its iron index and online physical trading platform to provide a transparent and accurate pricing data scheme for domestic and overseas participants, Dong Chaobin, president of the CBMX, said in China Daily.
"The price index will be calculated based on the actual trading prices at domestic and foreign ports," Mr Dong said. "The trading platform is designed to serve international and Chinese iron ore producers, business traders and steel companies."
The platform will enable China have more say in global iron ore pricing, said Liang Ruodong, CBMX vice president.
"Many overseas steel makers are interested in the platform and want to join the system," he said.
Prices of successful online trades will be posted in the platform without the need to identify buyers or sellers, a move meant to improve the accuracy and reliability of price statistics.
Mr Dong said the CBMX will provide a transparent and public channel for iron ore producers and steel makers to choose their business partners for trading.
Financial organisations and banks have been discouraged to participate in the platform to avoid speculations.
Analysts see the new iron index and online physical trading platform is fairer than the current inquiry system practice used by most companies and that it would be successful because pricing will be based on successful online transactions.
As the pricing of the platform will be dictated by iron ore buyers, sellers and actual posted online, China stands to gain more being the world's biggest iron ore importer.