What is 'Dalian Commodities Exchange'

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

BREAKING DOWN 'Dalian Commodities Exchange'

The Dalian Commodities Exchange has been a key component in the revitalization of Northeast China and its 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 and has the deepest pool of liquidity of any commodities exchange in China. The exchange emerged from the restructuring of China’s futures industry, which was revived in 1990 after a 60-year hiatus, but saw the government close many of the 40-plus exchanges which emerged because of widespread price manipulation. It is a non-profit, self-regulating entity with about 200 members and over 160,000 investors. It also has the largest volume of any commodities exchange in China. Since the exchange was established, it been an important player in the production and circulation of mainland soybeans. Over the next decade of market ratification, the exchange earned a reputation among investors for its financial integrity with prudent risk management and great market functionality in international price correlation, transparency and liquidity.

The Dalian Commodities Exchange started off as an agricultural commodities exchange before expanding into industrials (coking coal and iron ore) in 2013. It now has almost half a million market participants. Only around 2 percent of those are corporate accounts. 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. According to Futures Industry Association (FIA), the Dalian Commodities Exchange was the 8th largest exchange in the world by trading volume in 2016. 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. Long The Basis

    Long the basis is the practice of purchasing a commodity and ...
  2. Commodity

    A commodity is a basic good used in commerce that is interchangeable ...
  3. Futures Exchange

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

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

    A commodity trader focuses on investing in physical substances ...
  6. Commodity Pool

    A commodity pool is a private investment structure that combines ...
Related Articles
  1. Investing

    Analyzing The 5 Most Liquid Commodity Futures (WTI, ZC)

    Crude oil leads the pack as the most liquid commodity futures market, followed by corn and natural gas.
  2. Investing

    DBC: PowerShares DB Commodity Tracking ETF

    Find out about the PowerShares DB Commodity Tracking ETF, and explore a detailed analysis of the fund that tracks 14 distinct commodities using futures contracts.
  3. Investing

    U.S. Stocks Could Be Hurt By Chinese Soy Tariffs

    Believe it or not, the U.S. exports soy. And China is its biggest customer.
  4. Investing

    The Growth In Palm Oil

    With increasing populations, new solutions for how to feed and meet the energy requirements will have to found.
  5. Investing

    Top 3 Commodities ETFs for 2018

    Commodities funds trended down in the first half of 2017 but have been moving up since June. These ETFs could continue their momentum.
  6. 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.
  7. Investing

    Who Owns The Stock Exchanges?

    As M&A heats up among the exchanges, here's how the market currently looks.
  8. Investing

    Hedge Funds Pray for High Commodities Prices in 2017

    The commodities rally in 2016 was strong, giving hedge funders hope for 2017.
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. What types of futures contracts are typically sold on an exchange?

    Explore the wide variety of available futures contracts traded on exchanges, which range from agricultural commodities to ... Read Answer >>
  3. 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 >>
  4. What are tradable commodities?

    Understand what tradable commodities are as well as the rules and risks governing how they are sold and traded in the marketplace. Read Answer >>
Hot Definitions
  1. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  2. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  3. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  4. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  5. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
  6. Dividend

    A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Trading Center