By James Poole Nov 24, 2014
Bloomberg
CME Group Inc., the world’s largest futures market operator, will start trading iron ore with 58 percent content from next month, it said in a statement.
The cash-settled contract will have January 2015 as the first listed month with a size of 500 dry metric tons and pricing based on ore delivered to China, it said.
Iron ore derivatives with 62 percent content already trade on the Singapore Exchange, the Dalian Commodity Exchange and the CME. The steel-making raw material capped the fifth straight weekly drop on Nov. 21 with prices trading near the lowest since 2009 on concern that slowing growth in China will hurt demand as rising low-cost supply deepens a global surplus.
“It’s obvious the bourse wants to fill in a blank in exchange-traded ore derivatives, since Dalian and Singapore only offer products related to 62% ore,” Wu Yichao, general manager at investment firm Beijing Liaosu Development Trading Ltd., said from Beijing. “Its success won’t be a given since most investors looking to hedge or speculate perhaps still prefer the benchmark 62% in line with most physical supply.”
The Singapore Exchange plans to start two cash-settled contracts for 58 percent ore delivered to China in early 2015, the bourse said on Oct. 24.
“The commodities boom in Asia has created an increased need for risk management,” said William Knottenbelt, Senior Managing Director, International at the CME.
Ore with 62 percent content delivered to Qingdao lost 6.8 percent last week, dropping to $70.20 on Nov. 19, the lowest level since June 2009, data from Metal Bulletin Ltd. showed. The price retreated 0.9 percent to $70.31 a dry ton on Nov. 21.
Prices collapsed 48 percent this year as surging low-cost output from Rio Tinto Group in Australia and Vale SA in Brazil spurred the glut. Data from Asia’s largest economy last week showed a drop in new-home prices and rising bad loans. The slump bears out a September forecast from Tom Albanese, former head of Rio Tinto, who said prices would remain weak for a sustained period.
Bloomberg
CME Group Inc., the world’s largest futures market operator, will start trading iron ore with 58 percent content from next month, it said in a statement.
The cash-settled contract will have January 2015 as the first listed month with a size of 500 dry metric tons and pricing based on ore delivered to China, it said.
Iron ore derivatives with 62 percent content already trade on the Singapore Exchange, the Dalian Commodity Exchange and the CME. The steel-making raw material capped the fifth straight weekly drop on Nov. 21 with prices trading near the lowest since 2009 on concern that slowing growth in China will hurt demand as rising low-cost supply deepens a global surplus.
“It’s obvious the bourse wants to fill in a blank in exchange-traded ore derivatives, since Dalian and Singapore only offer products related to 62% ore,” Wu Yichao, general manager at investment firm Beijing Liaosu Development Trading Ltd., said from Beijing. “Its success won’t be a given since most investors looking to hedge or speculate perhaps still prefer the benchmark 62% in line with most physical supply.”
The Singapore Exchange plans to start two cash-settled contracts for 58 percent ore delivered to China in early 2015, the bourse said on Oct. 24.
“The commodities boom in Asia has created an increased need for risk management,” said William Knottenbelt, Senior Managing Director, International at the CME.
Ore with 62 percent content delivered to Qingdao lost 6.8 percent last week, dropping to $70.20 on Nov. 19, the lowest level since June 2009, data from Metal Bulletin Ltd. showed. The price retreated 0.9 percent to $70.31 a dry ton on Nov. 21.
Prices collapsed 48 percent this year as surging low-cost output from Rio Tinto Group in Australia and Vale SA in Brazil spurred the glut. Data from Asia’s largest economy last week showed a drop in new-home prices and rising bad loans. The slump bears out a September forecast from Tom Albanese, former head of Rio Tinto, who said prices would remain weak for a sustained period.
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