London, 14 October 2013
Marex Spectron, the leading global independent commodities broker, has opened financial iron ore broking desks in Oslo and Singapore to service growing client demand for access to hedging and speculation strategies in this increasingly important market.
Heading the financial iron ore team from Oslo, Norway is experienced commodity trader Kristian Thunes, formerly of Credit Suisse. Kristian has been involved in the iron ore derivatives market since its inception, and has filled various roles in developing derivatives trading desks in energy and commodities.
Also joining the financial iron ore team in Oslo are Richard Arnesen, Saurab Joshi and Salman Majid, all experienced brokers with backgrounds in commodity derivatives.
Benjamin Beng, an experienced commodity swaps broker formerly of Jefferies in Hong Kong will be based in Marex Spectron's Singapore office.
The new desk complements Marex Spectron's brokerage of physical products in the ferrous complex, and enhances Marex Spectron's servicing capability across commodity markets.
Marex Spectron has a significant presence in global physical and financial metals markets and is a category-one, ring-dealing member of the London Metal Exchange as well as providing execution clearing services for COMEX and NYMEX products, exchange-traded and OTC precious metals products.
Kristian Thunes said: "Risk management in steel production is more relevant than ever, and we firmly believe in this team's capabilities in providing tailor-made solutions for both hedging and physical requirements."
At the heart of the steel making industry, the iron ore market has been fuelled by the tremendous growth in demand for steel products and industrial production. Seaborne trade of iron ore totalled over 1.1 billion metric tonnes in 2012. Sensitive to transport constraints, significant pricing volatility in the iron ore market has further incentivised market participants to hedge their production margins. A total of 109 million tonnes of iron ore swaps was cleared through SGX in 2012, while volumes for 2013 are expected to more than double on the back of strong demand and increased access for market participants. Meanwhile, the iron ore options market has grown exponentially since mid-2012, registering more than 4 million tonnes traded in June 2013 only.
Gordon Bennett, Managing Director and Global Head of Energy at Marex Spectron, said: "We are exceptionally proud of our new team, which complements our on-going efforts to capture the growth in the iron ore market and wider steel complex. This move also opens up new opportunities from a value chain perspective, as well as a further utilization of our physical brokerage capabilities."
The major financial contract for iron ore is the CFR China (62% Fe Fines) Swap, settled in cash at the average of The Steel Index (TSI) iron ore reference price. The contract has seen exponential growth since its inception, and regularly sees in excess of 1 million metric tonnes traded daily. 90% of global swaps volumes are cleared through SGX AsiaClear in Singapore.