SINGAPORE October 28 2014 4:42 PM
SINGAPORE (Scrap Register): Singapore Exchange (SGX) has announced that it will launch new derivatives contracts for 58% Fe iron ore fines, subject to regulatory approval. Building on the success of its TSI-based 62% Fe contracts, the new swaps and futures contracts to be listed by the exchange will be settled using TSI's new index for 58% Fe fines. The launch is scheduled for early next year.

"SGX is pleased to be working once again with TSI to introduce the SGX TSI Iron Ore CFR China (58% Fe Fines) Futures and Swap," said Lily Chia, Head of Product Management, Commodities, SGX. "This will extend the iron ore suite to meet the growing industry need to effectively manage their price exposure in the iron ore 58% market. SGX, as the home of international iron ore derivatives clearing, is looking forward to develop this market together with our partners and intermediaries,"

TSI launched its new index for 58% Fe low alumina fines in July this year in response to growing industry demand for an index reflective of lower grade Australian products with low impurities and high loss on ignition properties (now the most prevalent seaborne iron ore in the 56-59% Fe range). The pricing point is CFR Qingdao port, China. The specifications for the new index, shown below, contrast with TSI's original 58% Fe index developed in 2008 which reflected typical Indian material which was more commonplace in the seaborne market at that time.