Cargill trades first steel scrap swap

Wed Apr 6, 2011 4:24pm GMT

* Interest in steel swaps increases - FIS
* CME launches new steel swaps
* LME also considers new steel contract
By Silvia Antonioli

LONDON, April 6 (Reuters) - Cargill traded the first over-the-counter steel scrap swap on Wednesday, as interest in steel derivatives soars, said Freight Investor Services (FIS), which brokered the deal.

Privately held food producer Cargill CARGIL.UL CARG.UL traded a steel scrap swap tied to May delivery of 1,000 tonnes of material to Turkish ports at $422 a tonne.

Its counterparty was a European metals trading company which refused to be named.

"We are starting to see a lot of people getting involved," said Sam Mehew, steel derivatives broker at FIS.

To cash in on increasing interest from industry participants and financial investors in steel derivatives, the Chicago Mercantile Exchange Group launched three steel swap contracts on Tuesday.

The London Metals Exchange said it was also considering launching some new steel contracts.
(sourced:Thomson Reuters)