LONDON The Singapore
Exchange (SGX) launched its long-awaited iron ore futures
contract April 8 as interest increases in ferrous derivatives
and new U.S. market regulations come into effect.
The SGX originally planned to
launch the contract in January in a bid to attract and retain
U.S. clients unable to trade over-the-counter (OTC) swaps due
to new rules set out in the Dodd-Frank Wall Street Reform and
Consumer Protection Act (amm.com, Dec. 18).
The futures contract size is 100
tonnes compared with 500 tonnes for iron ore swaps trades on
Singapore is the hub of the
voice-brokered OTC iron ore derivatives market, which launched
in 2007 and has seen volumes gain traction over the past year.
The volume of iron ore swaps traded on the SGX topped 20
million tonnes in March, making it the contracts biggest
trading month ever.
Iron ore futures contracts are
also offered by Chicago-based CME Group Inc. and Atlanta-based
InterContinental Exchange Inc., as well as the Singapore
The Dalian Commodity Exchange,
which launched the worlds first physical-delivery coking
coal futures contract in March (
amm.com, March 22), reportedly also plans to
launch an iron ore futures contract in the near future.
A version of this article
was first published by AMM sister publication Steel