UPDATE: Iron Ore Derivatives Above $1 Billion For 1st Time In August
September 05 2011 - 6:01AM
Dow Jones News
The nominal value of iron ore derivative contracts traded in
August topped $1 billion for the first time in a single month, The
Steel Index said Monday.
August iron ore trading volumes also set new records at over 6.6
million metric tons, an increase of more than 50% on the previous
month, TSI said.
The majority of iron ore swap contracts were cleared by
Singapore's SGX exchange, which processed 8,554 lots in August, the
equivalent of 4.3 million tons, TSI said. This was 11% above the
previous monthly record. The volume of SGX open interest--the total
number of contracts that have yet to be closed or delivered
on--also reached a record high of 8,661 lots, up 38% on the July
peak, the company said.
An iron ore swap involves buying or selling at a fixed price
against a floating price, like an index. Liquidity is still an
issue for the iron ore swaps market, which Credit Suisse (CS) and
Deutsche Bank AG (DB) pioneered a couple of years ago.
"Liquidity risk is starting to diminish, which should encourage
a new wave of market participants entering in the coming months,"
said Gabrielle Richou, manager at the Iron Ore and Steel
Derivatives Association.
CME Group also saw a marked increase in iron ore trading
activity in August, clearing over 2 million tons of derivatives
traded using TSI's iron ore index, of which 1.5 million tons were
options, TSI said.
The Steel Index is one of several information providers that
provides indexing for iron ore prices. It publishes two daily iron
ore reference prices--one for iron ore fines, a type of iron ore
product with 62% ferrous content and one for 58% ferrous content
fines for Chinese imports.
-By Francesca Freeman, Dow Jones Newswires; +44 (0)20 7842 9412;
francesca.freeman@dowjones.com
CME (NASDAQ:CME)
Historical Stock Chart
From Jun 2024 to Jul 2024
CME (NASDAQ:CME)
Historical Stock Chart
From Jul 2023 to Jul 2024