Inquiries build as scrap contract nears launch
Sep 06, 2012 | 03:44 PM
| Anne Riley
NEW YORK As CME Group Inc. gears up to launch its first-ever U.S. ferrous scrap futures contract early next week, scrap players up and down the supply chain say the new hedging tool has piqued their interest, even as others remain wary of the fledgling product.
"I like the concept, but the proof will be in the usage," one West Coast scrapyard operator told AMM. "Like any other contract, it will take time for buy-in."
The contract, which will begin trading Sept. 10, will be listed on the Nymex and financially settled against AMMs Midwest Ferrous Scrap Index for No. 1 busheling (amm.com, Aug. 17). AMMs index, launched in June, is calculated monthly based on tonnage-weighted and normalized transaction data.
Although the futures contract will not go live until early next week, CME director of metals research and product development Youngjin Chang said inquiries into the new product have been flowing in steadily since June 20, when the CME first announced its licensing agreement with AMM (amm.com, June 20).....
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