Wednesday, 05 Oct 2011
Reuters the exchange said reflecting strong interest in the cash-settled hedging tool that the volume of iron ore futures contracts traded on the Singapore Mercantile Exchange reached 1.1 million tonnes in September.
SMX owned by India Financial Technologies, introduced its cash settled iron ore futures contract on August 12. The contract is the world first dollar-priced iron ore futures open to global investors seeking to hedge prices of the steelmaking ingredient.
Last month trading volume represents a fourth of the volume of iron ore forward swaps cleared by rival Singapore Exchange in August which at a record 4.3 million tonnes comprised around two thirds of the global total.
SGX which launched its iron ore swaps in April 2009 said separately on Tuesday that volumes dropped to 7,957 lots in September equivalent to 3.98 million tonnes from 8,564 lots in August.
The world biggest buyer of iron ore, SMX said in a statement that there has been active interest in the SMX contract from players in physical and financial markets including traders based in China
Mr Vaidyalingam Hariharan SMX interim chief executive said in the statement that "Based on the response that the iron ore futures contract is receiving we are confident of creating a robust benchmark for the iron ore industry."
The shift to quarterly pricing for iron ore contracts from annual pricing since April last year spurred interest in hedging instruments as mills and traders managed their costs against spot prices IODBZ00-PLT which have tripled since late 2008.
(Sourced from Reuters)
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