Study On The Iron Ore Futures Strategy Based On Price Forecasting

Iron ore is one of the important industrial raw materials in China, and in recentyears，with soaring of the import quantum of iron ore and expanding of the scale of thespot market，the features of pricing mode for iron ore are becoming increasinglyshort-termism，indexation，and financialization，also，foreign iron ore financial derivativesmarket is thriving at the same time. Our country should seize the opportunity to introducethe iron ore futures and strive for the rights in global pricing power for iron ore whilefacing the inexorable trend in new pricing mode for iron ore and the fact that lack theglobal pricing power in the monopoly situation.By researching the iron ore futures market in the dissertation, Making clear theoperating mechanism in iron ore futures market，Sorting the function and effect of the ironore futures markets for iron and steel industry out，Refining the relation between iron orefutures market and spot market. Put forward positive effect for domestic iron and steelenterprises on this basis, i.e. providing price information and risk aversion. Thedissertation provides four basic methods while helping the domestic enterprises to getbetter use of the iron ore futures markets. The first is buying appropriate number of rawmaterials futures (ore, coal).locking the cost of the raw materials suit with the forward salecontract. The second is selling ore, coal and rebar to reduce the risk exposure and controlthe stock price risk when inventory level is excessive. The third is buying and selling Orefutures contract to get the risk free return when basis is more beneficial. And the forth isanglicizing the arbitrage between iron ore and steel products and determine the effect oniron ore hedging. At last the dissertation show the detail ways and content on the design ofthe iron ore futures contract.