What is the 'Dalian Commodities Exchange'

The Dalian Commodities Exchange is located in Dalian, China that trades futures contracts on a wide variety of commodities. The exchange the largest trader of agricultural futures in the world. 

BREAKING DOWN 'Dalian Commodities Exchange'

The Dalian Commodities Exchange has been a key factor in the revitalization of Northeast China's expansion as an international agricultural hub, in part due to the area’s strategic location with access to railroads and highways. The exchange performs several major functions, including providing venues for futures and options trading, developing and listing contracts, organizing and supervising trading, clearing, and settlement; market surveillance and rule enforcement, formulating and implementing risk management rules, organizing marketing and investor education events, market data and information services, and more.

History of the Dalian Exchange

The Dalian Exchange was established on February 28, 1993. China's futures industry was revived in 1990 after 60 years, at which point the Dalian Exchange was established. It is a non-profit, self-regulating entity with about 200 members and over 160,000 investors. The exchange has the largest volume of any commodities exchange in China, in part due to the fact that the exchange is an important venue for the circulation of soybeans grown in mainland China. Through the nineties the exchange gained a reputation for financial integrity, risk management and functionality in the market, as well as for transparency and liquidity.

In 2013, the Dalian Commodities Exchange expanded from its role as an agricultural commodities exchange to include industrials, such as iron ore and coke coal. The exchange now has nearly 500,000 participants. In 2015, the DCE was ranked 8th out of the leading global derivatives exchanges by the Futures Industry Association, as well as the largest futures market for oils, plastics, coal, metallurgical coke, and iron ore. 

Among its lesser-known traded commodities, the exchange trades: linear low-density polyethene, polypropylene, palm oil futures, eggs, fiberboard, soybeans, soybean meal, soybean oil, genetically modified soybeans, soybean meal options futures, rice, and corn. In 2016, the Futures Industry Association (FIA) reported that the Dalian Commodities Exchange was the 8th largest exchange in the world by trading volume. It boasted half the domestic market share in 2007, and captures roughly 2 percent of global futures market share, including financial futures.

RELATED TERMS
  1. Commodity Market

    The commodity market is a physical or virtual marketplace for ...
  2. Futures Exchange

    A futures exchange is a central marketplace, physical or electronic, ...
  3. Exchange

    An exchange is a marketplace in which securities, commodities, ...
  4. Commodity

    A commodity is a basic good used in commerce that is interchangeable ...
  5. Dojima Rice Exchange

    The Dojima Rice Exchange was the world's first commodity futures ...
  6. Miami Stock Exchange

    The Miami Stock Exchange offers a full range of processing and ...
Related Articles
  1. Investing

    Stock Exchanges Around The World

    We tell you about five of the most popular stock exchanges from around the globe.
  2. Investing

    How to Use Commodity Futures to Hedge

    Both producers and consumers of commodities can use futures to hedge. We explain, using a few examples, how to achieve commodity hedging with futures.
  3. Investing

    The Countries Affected By Falling Commodity Prices

    Weaker Chinese demand is helping to drive down commodity prices, which has significant effects on the global economy.
  4. Investing

    The Role Of Speculators In The Commodity Market

    Contrary to popular belief, speculators are important for the market. Find out exactly what they do.
  5. Investing

    Time to Buy Commodities, Trade War Concerns Oversold: Goldman

    The Wall Street powerhouse believes that the recent trade war-inspired commodity sell-off is overdone.
  6. Investing

    Top 3 Commodities ETFs for 2018

    Commodities ETFs are a great way for investors to jump into the sector while avoiding some of the volatility that tends to befall the individual stocks. Here are three with momentum.
  7. Trading

    Resistance Levels Suggest Commodities Are Headed Lower

    Nearby resistance on key commodity-related charts suggests the bears are taking control of the momentum and that the downtrend is likely to continue.
  8. Investing

    Stock Exchanges: A Global Tour

    Check out the history and inner workings of the world's six most well-known stock exchanges.
RELATED FAQS
  1. How can I calculate the notional value of a futures contract?

    Learn how the notional value of a futures contract is calculated, and how futures are different from stock since they have ... Read Answer >>
  2. How can electricity be traded as a commodity by an individual investor?

    Learn the characteristics unique to electricity trading as a commodity and how investors can trade electricity futures on ... Read Answer >>
  3. Move from an OTC to a major exchange

    In order to move a company from over-the-counter market to a major exchange, a number of conditions must be met to being ... Read Answer >>
  4. What's the difference between a commodity and a product?

    Understand the difference between commodities and products, and learn how they are connected to each other and to market ... Read Answer >>
  5. Who uses bills of exchange?

    Find out who uses bills of exchange, why they are important in international trade and what happens when a bill is traded ... Read Answer >>
Trading Center