SGX's New HRC Steel Index Futures and Swaps Draw Lots of Broker Interest

SHANGHAI, Feb. 19 (SMM) - The Hot-Rolled Coil Steel CFR ASEAN (HRC Steel) Index Futures and Swaps Contract launched by Singapore Exchange (SGX) this week has drawn a lot of broker interest, Shanghai Metals Market has learned.

The HRC Steel index futures and swaps, which are Asia’s first seaborne steel derivatives, started trading on the SGX on Monday, Feb. 17.

Freight Investor Services Ltd. executed the first swap on the HRC Steel contract against The Steel Index (TSI)’s ASEAN HRC index, priced at $570 per ton on the March 2014 contract, between Concord Fortune Resource Pte Ltd and a European counterpart.

SSY Futures Ltd. was another broker who traded the HRC Steel contract on its first day, SMM understands.

``This is a very exciting development and will greatly enhance not only iron ore and steel derivatives trading but also allow steel producers in the pacific region to manage risk in both their raw material and finished product,’’ Mark Richardson, head of SSY Futures, said in a press release.

Steel coils are the most widely used product in the steel industry, accounting for around 40% of the 1.3 billion tons of steel consumed each year worldwide, according to TSI.

HRC is used mainly to produce sheet metal or simple cross sections, used extensively in automotive, appliance and construction markets.