Iron ore swaps volume hit record in October - Report

Friday, 04 Nov 2011

According to Steel Index, the volume of forward iron ore swaps cleared globally soared to an all-time high above 9 million tonnes in October, as prices collapsed on slower demand from top consumer China.

Steel Index said that the contracts were valued at around USD 1.4 billion and trumped a previous record in August when volume reached more than 6.6 million tonnes worth over USD 1 billion.

Steel Index said that the majority of the contracts last month were cleared on the Singapore Exchange where volume hit 15,443 lots, or 7.7 million tonnes.

Spot iron ore prices .IO62-CNI=SI lost nearly 31% in October, their biggest monthly loss ever, as weaker steel demand in China slashed appetite for the raw material.

But prices began recovering on Monday as a more than 35% slump since September drew buyers back into the market, although traders said worries that steel demand in China may remain tepid for the rest of 2011 could limit any rebound.

Mr Oscar Tarneberg senior analyst for Steel Index in Asia said that "The surge in iron ore swaps trading volumes in October reflects the increased price risk in the physical market.”

He added that "With prices falling so precipitously, swaps offer physical participants a tool to hedge against the impact of sharp price movements and uncertainty."

(Sourced from Reuters)

Profit-taking ends rally in Central Appalachia OTC thermal coal

Mar09, 2011/519 am EST/1019 GMT

Washington (Platts) - Central Appalachia over-the-counter thermal prices ended their five-day winning streak Tuesday, as low trading volumes in the session probably signified some profit taking, one source said.

Price assessments were taken down along the entire forward curve, with the CAPP barge front months back in contango.

CAPP barge April prices dropped $1.75/st to $71.50/st, while May contracts were reduced by $1.25/st to $71.75/st.

CAPP barge Q2 2011 traded at $71.70/st for five barges. Q3 2011 traded at $73/st for five barges. Q4 2011 traded at $75/st for five barges twice.

CAPP barge Q2 2012 traded at $79.15/st for five barges.

A CAPP barge spread trade was also reported: Q3 2011 over Q4 2011 traded at a discount of $2/st for five barges twice.

In the thinly traded CAPP rail (CSX) physical market, April 2011 traded at $69.50/st for six trains, and at $69.75/st for one train.

Front month CSX physical contracts dipped $1.75/st to end the session at $69.50/st.

Powder River Basin product in the West, which has been less correlated to economic cycles, traded modestly lower during the session. April 8,800-Btu/lb prices declined 5 cents/st to $13.60/st.

PRB April 2011 physical traded at $13.50/st, and $13.60/st, each for one train. Q2 2011 physical traded at $13.85/st for one train twice.

No trades were reported on the Intercontinental Exchange electronic trading platform.

--By Chuck Noh,sourced Platts