I know it's the commodity that makes so much of the world we know and love possible iron ore is mined in 50 countries around the world and the largest producers are Australia and Brazil more than 2 billion tons of iron ore are mined every year the majority of sive on iron ore ends up in China the world's largest consumer iron ore is mainly graded according to the percentage of iron content Oz with 62% iron content are the most commonly traded but there has been increasing demand for the higher grade 65 percent iron ore also commands a different price depending on whether it is sold as fines or a lump product about 98 percent of iron ore is used in steelmaking the iron ore is sent to a blast furnace together with coking coal to produce pig iron typically it takes 1.6 tons of iron ore and about 0.8 tons of coking coal to produce one ton of pig iron the pig iron is then further refined to produce different types of steel the three main types of steel are Reba hot roll coil and villains these have a variety of uses from construction materials to cars and consumer products steel can also be recycled and scrapped compared to other commodities the iron ore market is a volatile one this is because it is so closely linked to many key sectors of Asia's fast changing economy such as mining industrial manufacturing real estate construction and infrastructure projects cars trains buildings and monuments all need iron ore as such iron ore is often used as a barometer for Asia's macro economy given the volatility of iron ore risk management and hedging are necessary to protect market participants from price exposure for example when iron ore prices increase the miners are happy for the mills are not as the cost of raw material used produced steel becomes more expensive on the other hand when iron ore price decreases if the opposite story with the mills enjoying lower cost while the miners face revenue pressure to reduce the risk of unexpected losses due to unpredictable prices miners and mills can engage in hedging miners would usually sell futures or buy put options to protect against prices falling whereas steel mills would do the opposite and buy futures or buy call option SG x has cleared more than a billion tons of iron ore annually since 2015 which is over 95% of the International iron ore derivatives market STX also clears a hundred percent of the International coking Hall derivatives market SGX offers up to 70% margin offsets when you trade the commodities sweet on our platform which includes iron ore coking coal offa s and steel making the virtual steel mill concept a reality trade the virtual steel mill on STX home of international iron ore derivatives you [Music]