CME Group, the world’s leading and most diverse derivatives marketplace, announced that its two new China portside iron ore futures contracts have launched and are available for trading. A total of 500 contracts have traded since launching on January 10, with participation from a number of firms, including ForChi Holding Pte Ltd, Theme International Trading and Trafigura. These trades were brokered by a number of inter-dealer brokers including BPI Financial Group, SSY Futures and Straits Financial Services.
“Our China Portside Iron Ore futures are complementary to our existing ferrous suite of products and provide a way for customers to manage their exposure to landed iron ore cargo prices on-shore in China,” said Young-Jin Chang, Managing Director and Global Head of Metals at CME Group. “We are pleased to see strong industry interest and support for these iron ore futures contracts.”
“The launch of these two new China Portside contracts by CME Group gives market participants a key differentiated offering in the iron ore derivatives space and provides the opportunity to trade the import margin, adding more variety and sophistication to trading strategies used for existing iron ore products,” said C.J. Zhang, CEO, Theme International Trading. “We are excited in supporting and trading these new contracts, and firmly believe that such product innovation is healthy for the marketplace and signifies important progress in the iron ore trading and risk management space.”
“The launch of CME Group’s China Portside Iron Ore futures contract is an important milestone in the development of the iron ore derivatives market. These contracts will offer our customers a new hedging tool for onshore portside transactions, which are becoming an increasingly important part of iron ore price discovery,” said Roger Quek, CEO of Straits Financial Services. “These are compelling additions to CME Group’s suite of ferrous metals derivatives, and we are excited to play a key role in helping to grow the liquidity in these innovative contracts.”
These two new CME Group contracts are financially-settled based on assessments for portside prices published by Argus Media. The Iron Ore China Portside Fines CNH fot Qingdao (Argus) futures contract settles to the Argus PCX 62% Fe Portside Iron Ore Index and is quoted in CNH per wet metric ton, while the Iron Ore China Portside Fines USD Seaborne Equivalent (Argus) futures contract settles to the Argus PCX Seaborne equivalent index and is quoted in USD per dry metric ton.