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terça-feira, abril 28, 2009

Iron ore trades on Singapore Exchange for the first time

By Press Release

26 Apr 2009 at 10:56 PM GMT-04:00

For the first time in the history of the commodity, iron ore has been

traded on an exchange.

Hong Kong – (April 27, 2009) – For the first time in the history of the

commodity, iron ore has been traded on an exchange.

Since the first Over–the–Counter (OTC) iron ore Swap was launched by

Deutsche Bank and Credit Suisse in May 2008, an estimated 9,000,000 metric

tonnes of swaps have been traded. However, all of these trades have been

concluded on a bilateral basis with contracting parties being open to

counter–party risk.

Singapore Stock Exchange (SGX) announced on April 17, 2009, that it would

launch the world's first cleared OTC Iron Ore Swap contract via the SGX

AsiaClear® platform on April 27, 2009. The contract trades in lot sizes of

500 metric tonnes and is cash settled against the monthly average of The

Steel Index 62% Iron Ore Fines CFR China reference price, in the expiring

month. Exchange clearing by AsiaClear® mitigates the counter–party risk in

OTC trading of financial iron ore swaps. Furthermore, the move will help

the development of liquidity in the instrument which will be critical in

the market becoming firmly established.

London Dry Bulk Ltd. (LDB), the world's only specialist broker of iron ore

in the physical and financial markets, brokered the first trade on opening

of trading at 8am today [April 27, 2009]. LDB CEO Clive Murray said, "We

are very proud to be part of these developments in the iron ore industry

and to have brokered the first iron ore trade on SGX AsiaClear." LDB has

been a key participant in the development of the market in iron ore swaps

from the beginning, and leverages its expertise in developing a prompt

market in coal to make iron ore as successful. The company actively brokers

iron in both the physical and financial markets. "To be successful,

particularly in the current economic environment, a company's ability to

maintain profit margins remains key. With the establishment of iron ore

swaps trading and the already active trade in financial steel contracts we

are promoting the concept of hedging a company's spread. This is similar to

what happens daily in the energy sector where companies trade the dark– or

spark–spread. In the steel industry we would like to see the development of

the 'Red Hot Spread'," adds Clive Murray.

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