Iron ore futures debut on Indian comexes; liquidity eyed

* Iron ore contracts start in India with moderate volumes
* ICEX's volumes at 24,600 DMT, MCX lags at 10,500 DMT
By Siddesh Mayenkar
MUMBAI, Jan 29 (Reuters) - Iron ore futures debuted on India's Multi Commodity Exchange (MCX) and Indian Commodity Exchange (ICEX) with moderate volumes, data from the exchanges showed, and analysts said the future success of these contracts would depend on liquidity.
Saturday's most actively traded Indian ore on the ICEX, with 62 percent iron content for March delivery, closed at 8,069 rupees per dry metric tonne (DMT), cost and freight (CFR) delivered to China.
ICEX's total volumes were 24,600 DMT, or 195 million rupees ($4.2 million), the third most-active contract after mustard seed, silver and copper cathode.
ICEX, part-owned by MMTC (MMTC.BO: Quote), India's biggest trader of iron ore, exceeded volumes on MCX.
"In coming days we shall see more physical market participants using (the) ICEX platform for effective risk management and hedging activities," said Sanjay Chandel, chief executive officer at ICEX.
On MCX, the largest exchange by turnover, Indian ore with 62 percent iron content for February delivery closed at 7,269 rupees per DMT, ex-Chennai Free On Board (FOB). Total volumes recorded were at 10,500 DMT or 77.2 million rupees.
"Given the size of iron ore market in India, this contract is a good sign for the market," said Harish Galipelli, vice-president, research with JRG Wealth Management, which hedges steel, gold among other metals for corporate clients.
India is the world's third-biggest iron ore exporter after Australia and Brazil, although its shipments dropped for a sixth straight month in December because of an export ban in its southern Karnataka state.
India normally exports around 100 million tonnes of iron ore annually of which around a quarter comes from Karnataka.
" The future is vibrant for these contracts, but we also need to see how liquidity pans out," said JRG's Galipelli. (sourced:reuters)