Thu,Jul21, 2011
LONDON, July 21 (Reuters) - Goldman Sachs started to trade iron ore swaps earlier this year and is preparing to enter the physical iron ore market, market sources said.
Growing liquidity levels in the iron ore swaps market attracted many banks to invest in it and some have also decided to set up physical iron ore desks to strengthen their positions.
"Some of the banks are looking at getting more involved on the physical side, which further enhances their trading opportunities in the paper market," an iron ore swaps broker said.
The volume of iron ore swaps cleared on the Singapore Exchange (SGX) in May reached a record at 3.5 million tonnes, up from 1.6 million in April and it is on track to hit a new record at 4 million tonnes in July, brokers said.
"It is always good to have physical positions to back your financial positions but it's always going to take some time," said Macquarie analyst Colin Hamilton, underlining that regulatory issues make it a slow process for banks.
Goldman Sachs declined to comment on the subject.
Posts
No comments:
Post a Comment