Singapore Mercantile Exchange (“SMX”), the first pan-Asian multi-product commodity and currency derivatives exchange, has announced its plans to list the world’s first Iron Ore Futures Contract*, settled basis the Metal Bulletin Iron Ore Index. Metal Bulletin is the leading independent premium information and pricing provider for the metals industries.
The Metal Bulletin Iron Ore Index (MBIOI) utilises daily price data from a broad spectrum of industry participants and through leading independent Chinese steel consultancy and data provider Shanghai Steelhome’s widespread contact base of steel producers and iron ore traders across China.
MBIOI’s tie-up makes it the world’s only index to-date with access to such data from a major Chinese partner. The index is a tonnage-weighted calculation of actual physical transactions, normalised to 62% Fe, CFR Qingdao and is published daily at mid-day London time.
Thomas J. McMahon, Chief Executive Officer of SMX, said: “This partnership with Metal Bulletin is indicative of our diligence towards collaborative listings with key industry participants. It is especially strategic, given that China is the world’s largest importer of iron ore and Shanghai Steelhome’s data feed. The futures market for iron ore and iron ore spot market have only recently begun to take shape and as such, both are in need of a firm reference-price mechanism. SMX is stepping into that space in the markets via a robust index upon which effective price hedging can be conducted with a strong measure of certainty.”
Raju Daswani, Managing Director of Metal Bulletin, said: “As the market leader in metals reporting globally, Metal Bulletin has been reporting prices in the iron ore markets for close to a century. With a shift to short term pricing, SMX’s decision to work with our Iron Ore Index as a basis for global benchmarking is a logical move and another significant breakthrough for the iron ore industry.”
Metal Bulletin is the premium intelligence service for metals and steel market players globally, with coverage on all global metals and steel markets including scrap through a comprehensive package of the latest news, prices, expert market commentary and statistics.
SMX went live for trading on 31 August 2010 and this listing constitutes the Exchange’s first Futures Contract with an index as the underlying commodity. Regulated and licensed by the Monetary Authority of Singapore (MAS) as an Approved Exchange, SMX offers multi-currency and multi-asset clearing, trading and pricing for international participation via multiple connectivity options with guaranteed settlement and delivery.