PITTSBURGH Plans are
under way to launch a family of finished steel and scrap metal
futures products in the United States this year to provide
buyers and sellers along the steel supply chain another set of
tools to help manage price volatility.
Nasdaq OMX Group Inc. and World
Steel Exchange Marketing LLC (WSEM) announced May 6 that they
have partnered to develop a suite of financially settled
products on the Nasdaq OMX Futures Exchange Inc. (NFX).
The companies said they are
targeting a listing date in the fourth quarter following
regulatory filings with the Commodity Futures Trading
The contracts will be settled
against WSEMs SteelBenchmarker prices. SteelBenchmarker
launched by WSEM parent World Steel Dynamics Inc. (WSD),
Englewood Cliffs, N.J., and AMM/Metal Bulletin in
April 2006, publishes benchmark prices for hot-rolled band,
cold-rolled coil, standard plate and rebar in the United
States, Western Europe, China and world export markets, as well
as prices for ferrous scrap in the United States.
The first products the partners
expect to launch later this year are U.S. hot-rolled band, No.
1 heavy melting scrap, No. 1 busheling and shredded scrap, WSEM
wrote in an May 6 e-mail to customers. The next products could
include hot-rolled band, iron ore and coking coal on the world
market and in selected regions, WSEM added.
More details regarding the
proposed contracts will be announced at a later date, NFX
president Daniel Carrigan told AMM.
WSEM president Patrick McCormick
said the move should not come as a surprise. "We have been on
this mission for a while, and the enthusiasm showed by the
exchange has been wonderful," McCormick told AMM.
An earlier attempt by WSEM to
launch a hot-rolled futures contract on the New York Mercantile
Exchange based on its SteelBenchmarker pricing system was
abandoned in 2008 when another index was adopted instead (
amm.com, June 24, 2008). Since then, CME Group
Inc.which acquired Nymex in 2008has also
established a scrap futures contract based on
AMMs Midwest Ferrous Scrap Index for No. 1
amm.com, Sept. 11).
McCormick said that the
expertise of the WSEM team positions it to compete with the
existing CME coil contract. "We are at an advantage in the
industry because we talk their language. We can offer analytic
tools to help participants hedge," he said.