SMX partners with Metal Bulletin for world’s first Iron Ore Futures Contract
SMX Iron Ore Futures Contract*, settled basis the Metal Bulletin Iron Ore Index (MBIOI), is the Exchange’s first index-based derivative
Singapore, 29 September2010 – Singapore Mercantile Exchange (“SMX”), the first pan-Asian multi-product commodity and currency derivatives exchange, today 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.
Mr. 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.”
Mr. 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.
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.