core sector communique

SMX MBIO Index futures trade record volumes in May

• Volume jumps to a record 2.56 million tonnes in May
• 47% increase from previous high of 1.74 million tonnes recorded in March
• Over 7.38 million tonnes of iron ore traded in this year

Singapore, 11 June 2012 – The Singapore Mercantile Exchange witnessed record trading volumes in the world’s first and only global Metal Bulletin Iron Ore (MBIO) Index futures contract (SMMBIO) in the month of May. With 2,564,900 tons traded on the exchange through the month, the contract has seen a surge in trading interest since its launch last August. The total volume traded in May was 25,649 lots valued at USD 350.17 million.

Less than a year into its existence, the contract has already been seen as a successful tool providing market participants with the opportunity to cover their risk exposure in times of price volatility as seen in the month of May. This is evident from the consistent growth in participation with every passing month. The contract traded daily average volume of over 100,000 tonnes in the month May, with a sharp increase of 47% from the previous high in the monthly volumes in the month of March. With growing market awareness of the SMX MBIO Index futures, which offers iron ore players with a reliable hedging instrument on a robust exchange platform, there has been added interest from the market over the past few months.

SMMBIO is the world’s first and only iron ore index futures contract on a global platform, settled based on the Metal Bulletin Iron Ore (MBIO) Index of 62% iron ore, CFR Qingdao, China. The Index is a tonnage weighted calculation of transactions normalised to a base specification using the value-in-use of the material implied by the market. The Index is made up of three sub-indices created to balance the market with equal weighting (33.3%) for each sub-index (representing Producers, Traders and Consumers, with only the final index being published). The Index is calculated daily and published at 12pm London time. Metal Bulletin’s MBIO Index is an independent and robust representation of the seaborne merchant market for sinter fines delivered to China.

The SMX MBIO Index futures contract offers an easy entry and exit at any point of time to every participant based on their position in the market and price views. The screen based trading system provides transparency and confidence to the market participants. 

About Singapore Mercantile Exchange 

Singapore Mercantile Exchange is a pan-Asian multi-product commodity and currency derivatives exchange situated in Singapore. It offers a comprehensive platform for trading a diversified basket of commodities including futures and options contracts on precious metals, base metals, agriculture commodities, energy, currencies and indices. SMX offers market participants the benefits of market transparency, time zone convenience, price discovery and benchmarking, price risk management and multiple connectivity options. Counterparty clearing and settlement risk is effectively managed through its clearing house, the Singapore Mercantile Exchange Clearing Corporation. The regulator of Singapore’s financial markets – the Monetary Authority of Singapore (MAS) – has granted SMX ‘Approved Exchange’ status since 2010. SMX is backed by the world’s leading creator of exchanges - Financial Technologies (India) Limited - which has successfully established 10 exchanges across India, Dubai, Singapore, Africa, Mauritius and Bahrain. SMX is a member of leading international derivatives industry associations, such as the Futures Industry Association (FIA), the Swiss Futures and Options Association (SFOA), the Association of Futures Markets (AFM) and the Futures and Options Association (FOA).

About Metal Bulletin

Metal Bulletin is the established leader in metals and minerals reporting. It has been reporting on iron ore transactions since the first print issue of the magazine was published in May 1913. Metal Bulletin’s reporting was instrumental in the development of the original iron ore benchmark pricing system, and it was also the first publisher to track the Chinese iron ore spot market since its creation in 2004. Since its development and launch in 2008, the Metal Bulletin Iron Ore Index has impartially and accurately tracked the iron ore spot market, and facilitated the industry’s move towards transparent pricing and longer-term risk management. The MB Iron Ore Index is a tonnage-weighted calculation of actual transactions which are normalised on value-in-use and freight to a single base chemistry and delivery point. Metal Bulletin's breadth of product offerings extends from online news and prices services, magazines, newsletters and online real time services, to directories and databases, books, research reports, and consultancy and the staging of events around the globe in the form of conferences and exhibitions. 

Metal Bulletin Limited is a wholly-owned subsidiary of Euromoney Institutional Investor Plc, which is itself majority-owned by the Daily Mail & General Trust Plc (DMGT). Since 2010, Metal Bulletin has been working with Shanghai Steelhome, the leading independent data provider and iron ore research house in China, to consolidate its strength in data collection.