Investing Guide at Deep Blue Group Publications LLC - Fledgling Chinese iron ore futures traded by speculators and small-time industry players are giving accurate predictions of moves in the iron ore spot price, which has become increasingly important to the health of Australia's biggest miners and national export revenue. [See http://deepbluegroup.org/]
Analysis by the The Australian shows price moves in the five-month-old Dalian Commodities Exchange iron ore futures price have become highly correlated to the overnight moves in the spot price, which Platts puts out well after market using private information [See http://deepbluegroup.org/blog/] from hundreds of physical iron ore traders.
The relationship was starkly illustrated when, overnight on March 10, the iron ore price had its biggest fall in years.
That day, before the price fall was announced, Dalian futures traders -- obviously plugged into physical price moves yet to be revealed to the market -- sold off hard.
The Dalian move contributed to a $16 billion rout on the Australian Stock Exchange, despite the official extent of the iron ore spot price move not being known.
Read full article: http://www.theaustralian.com.au/business/latest/iron-ore-futures-an-accurate-guide/story-e6frg90f-1226869331145
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