1. Report Industry Investment Rating There is no information provided regarding the report industry investment rating in the given content. 2. Core Viewpoints of the Report - The differences between Chinese and Singaporean iron ore futures lie in trading mechanisms, delivery methods, and market positioning. DCE iron ore is denominated in RMB, with physical delivery as the core, closely linked to the Chinese industrial chain. SGX iron ore is denominated in US dollars, with cash delivery, and more focused on financial attributes [1][100]. - Both DCE and SGX iron ore futures have a high price convergence with the spot price, providing a basis for hedging. However, their dynamic correlations differ, and neither the futures nor the spot prices follow a normal distribution, with significant basis fluctuations. Without considering the impact of value - added tax, the hedging effectiveness of SGX iron ore is 92.62%, better than DCE's 70.02%. The co - integration test shows that there is a long - term stable co - integration relationship between SGX iron ore and the spot, while there is no such relationship for DCE iron ore [2][101]. - Using the ECM model to estimate the optimal hedging ratio, without considering value - added tax, the optimal hedging ratio for DCE iron ore is 37.69%, and for SGX iron ore is 107.31%. The former has limited short - term price transmission efficiency and a slow equilibrium adjustment speed, while the latter requires an over - allocation of futures contracts to hedge spot risks, possibly due to amplified market volatility or unconventional basis changes [3][102]. - Under the ECM model, the risk avoided by the asset portfolio after hedging with SGX iron ore is 76.23%, higher than that of DCE iron ore. Although SGX iron ore is more volatile, its futures - spot price linkage is closer, and the variance of the SGX portfolio after hedging is lower than that of the DCE portfolio [4][103]. 3. Summaries Based on Relevant Catalogs 3.1 New and Chinese Iron Ore Futures Overview - **DCE Iron Ore Futures**: Launched in 2013, aiming to establish a pricing benchmark reflecting Chinese supply - demand relations. It has developed into the world's largest iron ore derivatives market. However, its market activity has weakened in recent years. It uses RMB for pricing, physical delivery, and has an 80% coverage of China's spot trade volume [11][13]. - **SGX Iron Ore Futures**: Launched in 2013, with US - dollar pricing and cash delivery, it provides an efficient risk - management tool and price - discovery platform for international investors. Despite facing the diversion pressure from DCE iron ore, its position - holding volume shows a stable and seasonal growth, indicating a mature market [16][17]. - **Contract Comparison**: Differences exist in contract design, delivery methods, margin and position - limit systems, and regulatory methods. DCE iron ore focuses on protecting the domestic industry, while SGX iron ore is more attractive to international capital [22][31]. 3.2 Iron Ore Futures Hedging Feasibility Analysis - **Correlation between Futures and Spot Prices**: Both DCE and SGX iron ore futures have a high correlation with the spot price, with correlation coefficients of 0.8901 and 0.9735 respectively. They can be used as hedging tools, but their applicable scenarios differ [34][43]. - **Descriptive Statistics of Futures and Spot Prices**: Neither the futures nor the spot prices follow a normal distribution, which is due to the complexity of the iron ore market and the heterogeneity of price fluctuations [56]. - **Descriptive Statistics of the Basis**: The basis of both DCE and SGX iron ore futures shows non - normality. Without considering value - added tax, the hedging effectiveness of SGX iron ore is higher than that of DCE iron ore [65][70]. - **Stationarity Test of Futures and Spot Prices**: The original price series of both DCE and SGX iron ore futures are non - stationary, but their logarithmic return series are stationary, meeting the requirements for further modeling [74][80]. - **Co - integration Test of Futures and Spot Prices**: There is a long - term stable co - integration relationship between SGX iron ore and the spot, while there is no such relationship for DCE iron ore [84][85]. 3.3 Estimation of the Optimal Hedging Ratio of Iron Ore Futures Using the ECM model, without considering value - added tax, the optimal hedging ratio for DCE iron ore is 37.69%, and for SGX iron ore is 107.31%. The short - term price transmission efficiency of DCE iron ore is limited, and the equilibrium adjustment speed is slow. The ratio of SGX iron ore exceeds 100%, which may be due to amplified market volatility or unconventional basis changes [90][94]. 3.4 Iron Ore Futures Hedging Effect Evaluation In the ECM model, the risk avoided by the asset portfolio after hedging with SGX iron ore is 76.23%, higher than that of DCE iron ore. Although SGX iron ore is more volatile, its futures - spot price linkage is closer, and the variance of the SGX portfolio after hedging is lower [98][99].