By Manolo Serapio Jr
MANILA, Aug 3 (Reuters) - The volume of iron ore futures traded on China's Dalian exchange surged to a record last month amid volatile prices, spurring flows into the world's most liquid derivatives market for the steelmaking raw material.
The Dalian Commodity Exchange handled 32.4 million contracts in July, trumping the previous record of 24.9 million in May, according to data from the bourse's website.
That was equivalent to 3.2 billion tonnes of iron ore, more than double the size of annual global seaborne trade.
It was a roller-coaster ride for benchmark spot iron ore prices last month as they spiked above $55 a tonne .IO62-CNI=SI after hitting a 10-year low of $44.10 three weeks earlier.
Most of those moves followed similar swings in Dalian iron ore futures, where the most-active contract DCIOcv1 rebounded from a record low of 317.50 yuan a tonne to a high of 374.50 yuan during that period.
"More liquidity begets more liquidity. As the market gets bigger, you have the depth that will draw more traders and speculators," said Helen Lau, analyst at Argonaut Securities in Hong Kong.
Launched in October 2013, Dalian iron ore futures are part of China's bid to help set the benchmark price for its biggest import commodity by volume.
Volume of iron ore swaps, futures and options traded on the Singapore Exchange SGXL.SI , the next most liquid derivatives market for the raw material where contracts are dollar-denominated, reached a record high 111 million tonnes in July, according to the bourse's website.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on Dalian volumes and iron ore prices:
http://link.reuters.com/qus64w
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>