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SGX launches new iron ore futures contract

Keywords: Tags  steel, iron ore, futures, swaps, Dodd Frank, Singapore exchange, Michelle Madsen

LONDON — The Singapore Exchange (SGX) launched its long-awaited iron ore futures contract April 8 as interest increases in ferrous derivatives and new U.S. market regulations come into effect.

The SGX originally planned to launch the contract in January in a bid to attract and retain U.S. clients unable to trade over-the-counter (OTC) swaps due to new rules set out in the Dodd-Frank Wall Street Reform and Consumer Protection Act (, Dec. 18).

The futures contract size is 100 tonnes compared with 500 tonnes for iron ore swaps trades on the exchange.

Singapore is the hub of the voice-brokered OTC iron ore derivatives market, which launched in 2007 and has seen volumes gain traction over the past year. The volume of iron ore swaps traded on the SGX topped 20 million tonnes in March, making it the contract’s biggest trading month ever.

Iron ore futures contracts are also offered by Chicago-based CME Group Inc. and Atlanta-based InterContinental Exchange Inc., as well as the Singapore Mercantile Exchange.

The Dalian Commodity Exchange, which launched the world’s first physical-delivery coking coal futures contract in March (, March 22), reportedly also plans to launch an iron ore futures contract in the near future.

A version of this article was first published by AMM sister publication Steel First.

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