Zhejiang Zhoushan Bulk Commodity Exchange, a government-controlled exchange in Zhoushan city in east China's Zhejiang province, is eyeing joining the growing number of Chinese commodities exchanges hosting an e-trading platform for iron ore, an exchange official confirmed.

ZZBCE aims to begin offering an e-trading capability for spot imported iron ore by the end of this year, he said, assuming that designing the contract runs smoothly and that the bourse secures the necessary approvals from government regulators and industry associations.

Offered on the platform will be cargoes imported from mainstream suppliers including BHP Billiton, Rio Tinto and Vale, Platts is told. The contracts will be US dollar-denominated but the ZZBCE is still to decide the settlement currency because of China's foreign currency controls. Other details are yet to be finalized.

Incorporated in July 2011 by the Zhoushan city government, ZZBCE began studying the feasibility of expanding its trading suite of steel raw materials commodities last year to include iron ore. Presently the exchange offers only imported and domestic nickel and domestic coking coal on its platform.

Nevertheless, exchange officials acknowledge growing competition in the spot iron ore e-trading arena, as well as the China Iron & Steel Association's strong promotion of the China Beijing Mining Exchange or CBMX as the core iron ore spot e-trading platform.

"[But] the iron ore market is big enough to accommodate more e-trading platforms other than just CBMX and GlobalORE," the official said. "Our comprehensive logistics services available at Zhoushan and the port's significance as an iron ore transshipment terminal will give our iron ore e-trading contract an edge," he added.

Zhoushan port on the Yangtze River Delta area was promoted as the country's fourth crucial economic development zone in the 12th five-year development plan spanning 2011-2015.

The port handled about 80 million mt of iron ore in 2012 and operates a deepwater wharf capable of accepting dry bulk carriers up to 400,000 deadweight tons. Baosteel Group and Wuhan Iron & Steel -- for whom the port is a key facility for iron ore transshipment -- each hold minority stakes in ZZBCE.