New Steel Futures Contracts

[rffrydr]

Steel futures introduced....

http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=41591&sn=Detail


...and nobody's gonna come.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Add the push public of OTC contracts. Australia taking longer to approve BHP/RIO co-marketing than original merger while endusers in Europe are adding to the china chorus. Steel-contracts face the problem of too much variety in too many applications--but maybe will resolve itself like heating-oil does the complexity of the "crack."
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

LME steel futures contract finally doing some business:
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Record month of steel futures trading in March at the London Metal Exchange

Trading in steel futures on the London Metal Exchange (LME) achieved record levels in March, with 10,662 lots traded, representing 693,030 tonnes (notional value = $346m).

Additionally, the Market Open Interest (MOI) in the Exchange’s Mediterranean steel contract has increased 108% since the start of the year, closing at 2,368 lots on Tuesday, 30th March, and demonstrating a renewed interest in the contracts as global markets recover and as the LME moves towards merging its existing regional steel contracts into a single global steel contract.

Chris Evans, Head of Business Development at the LME, said, “Steel markets are changing significantly and uncertainty about what the future will look like encourages a focus on risk management and specifically hedging. Steel futures at the London Metal Exchange are more relevant than ever and we are pleased with the traction this contract is getting in the market.”

[HenryTo]

A complete round-up of what various exchanges are doing with respect to creating a steel futures contract:
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Steel futures contracts: Who's doing what
Wed Feb 25, 2009 6:41am EST

Feb 25 - The London Metal Exchange launched steel futures contracts a year ago, aiming to set a benchmark price for the $500 billion steel industry.

Turnover has been growing slowly, with interest shown mainly by physical traders, LME brokers and mini-mills.

Four exchanges worldwide offer steel futures contracts and Shanghai Futures Exchange is expected to launch its own steel futures contracts soon.

Below are details of existing contracts, exchanges' latest plans for steel futures, and an estimated trading timetable.

LONDON METAL EXCHANGE (LME)

LME contracts, which cover steel billet for delivery in the Mediterranean and Far East, moved to open outcry trading last April and began cash trading in July, becoming a fully-fledged three month contract.

The total turnover since the launch is about 1.29 million tonnes, worth $673 million, with 1.1 million tonnes going through the Mediterreanean contract. There are 39 approved brands for delivery listed from 12 countries, representing a total capacity of 48.7 million tonnes.

The delivery locations for the Mediterreanean contract are Marmara region in Turkey and Dubai, United Arab Emirates. LME registered warehouses in Turkey are in Kocaeli and Tekirdag.

For the Far East contract the delivery points are Incheon, South Korea and Johor, Malaysia.



DUBAI GOLD AND COMMODITIES EXCHANGE (DGCX)

The Dubai Gold and Commodity Exchange launched its steel rebar contract in October 2007, with the last trade on contracts going through in September. Volumes topped 500 lots after 6-8 weeks, but faded by the end of December 2007.

The Dubai steel contract is for reinforcing bar (rebar), used in construction. Each contract is for 10 tonnes of grade W460 rebar of 12 metres and will allow for both cash settlement and physical delivery, the latter at DGCX-approved delivery points in Dubai, which can be used as warehouses for financing under similar terms as per LME warrants.

The DGCX has listed four delivery months.



CHICAGO MERCANTILE EXCHANGE (CME)

CME Group (CME.O), the world's largest derivatives exchange following its absorption of the New York Mercantile Exchange (NYMEX), launched its U.S. Midwest Domestic Hot-Rolled Coil (HRC) steel futures contract in October 2008.

It will trade electronically with 18 consecutive contract months and will settle against an index developed by Commodities Research Unit (CRU), which until now has provided the industry its only price gauge by polling steel producers.

The contract size is 20 short tons with a minimum price fluctuation of $5 per short ton and will be listed for 18 consecutive months.

SHANGHAI FUTURES EXCHANGE

Shanghai Futures Exchange, China's sole metals futures bourse, is planning to launch steel wire and reinforced bar futures.

Brokers familiar with the situation said the exchange planned to kick off steel-product futures trading on March 9.

NATIONAL COMMODITY & DERIVATIVES EXCHANGE

India's NCDEX steel long futures was first launched in March 2005. The basic grade that is traded and delivered is Mild Steel ingots. However, in addition to mild steel ingots (MS), MS Billets are also deliverable.

Mild steel is semi-finished steel used to make long steel products, which are then used mainly in construction of buildings, roads, bridges and other infrastructure.

There are 8 delivery points all over India, the world's fifth largest steel maker. The maturity of the contract is for a minimum of one month to a maximum of five months.

The average daily traded volumes is about 10,000-11,000 tonnes since launch, with the total turnover being 10 million tonnes so far.

[HenryTo]

Steel futures contract is officially launched at the LME:

http://www.ft.com/cms/s/0/ad1b0972-147d-11dd-a741-0000779fd2ac.html