core sector communique

SMX iron ore contract sets record volume of 1.1mt in September

Physical market players find iron ore futures contract attractive

§ September was the first full month of trading in the iron ore futures contract

§ SMX also achieves record turnover and trade volume on September 30

Singapore, 4 October 2011 – The world’s first and only global Metal Bulletin Iron Ore (MBIO) Index Futures Contract (SMMBIO) traded on the Singapore Mercantile Exchange (SMX) crossed the volume of 1.1 million tonnes in September, its first full month since the launch on August 12, 2011. The last day of September also saw SMX record its highest ever overall turnover and volume on a single day. The turnover was USD 635.23 million with a total volume of 19,231.

Active trading interest from the physical market has enabled the iron ore futures contract reach this key milestone within the iron ore derivatives industry. Ever since the launch of SMX MBIO Index futures contract there has been an enthusiastic response from major physical market and financial market players to trade in the contract. Traders based in China, the biggest importer and one of the largest markets of iron ore trade, have also shown active interest in the contract.

SMMBIO is the world’s first Iron Ore Futures Contract on a global platform, settled based on the Metal Bulletin Iron Ore (MBIO) Index. The Metal Bulletin’s MBIO index is an accurate and independent reflection of the seaborne merchant market for sinter fines delivered to China.

Mr V Hariharan, interim CEO of SMX said, “We are extremely pleased with the steady growth of trading on the SMX. Based on the response that the Iron Ore futures contract is receiving we are confident of creating a robust benchmark for the iron ore industry. The growing success of this contract has further strengthened Singapore’s position as a major iron ore trading hub.”

Mr Cameron Hunt, Director, Metal Bulletin Index said, “The excellent start to the SMX Iron Ore Futures contract is a testament to the strength of the SMX - Metal Bulletin Iron Ore Index combination. This is the strongest start to any iron ore financial product, and the rapid growth in liquidity demonstrates the appetite for a futures contract on a global exchange priced against an accurate, independent and established Index.”

SMX which went live on August 31, 2010 has seen its membership number double over the past 12 months crossing 50. The exchange had started with 25 members and four contracts and today has more than 50 members including 7 clearing members and 12 contracts. Among the leading clearing members signed-up thus far include Newedge, Ong First, Morgan Stanley, UOB, ICICI Bank, Citi and Phillip Futures. The prominent trade members include Glencore, Total Global Steel, Trafigura, Vitol and TransMarket. SMX trading sessions span Asian, European and US business hours, with central counterparty clearing performed by SMXCC. The SMX platform allows to remote participation through its diverse network of members and ISVs. The Exchange also offers its own proprietary front-end solution for direct market access.

SMX trading sessions span Asian, European and US business hours, with central counterparty clearing performed by SMXCC. The SMX platform allows remote participation through its diverse network of members and ISVs. The Exchange also offers its own proprietary front-end solution for direct market access.