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Chicago Climate Futures Exchange® (CCFE) and World Steel Dynamics announced today the formation of World Steel Exchange (WSE) to list futures contracts initially for steel scrap. The contracts will trade and clear on CCFE’s internetaccessible trading platform and will be based on the SteelBenchmarker family of price indices and other indices. CCFE, a Commodity Futures Trading Commission Designated Contract Market, is part of Climate Exchange plc, a publicly traded company listed on the AIM division of the London Stock Exchange (CLE.L).
“The trading of futures contracts on the World Steel Exchange will give those involved in buying or selling steel scrap, steel products and steelmakers’ raw materials the opportunity to hedge the price risk, which is a critical need given the volatility of prices in these sectors,” said Peter Marcus, Managing Partner of World Steel Dynamics.
“We are very excited about this joint venture,” said Dr. Richard Sandor, Chairman and Founder of CCX and CCFE. “The World Steel Exchange fits the mission of the Chicago Climate Exchange and the CCFE, it represents an expansion of our environmental products portfolio, and it offers a unique risk-management tool for the steel industry, scrap dealers and other market participants.”
The WSE venture will be supported by World Steel Exchange Marketing (WSEM), a new company. “The WSEM’s staff, currently five market experts, will become a valuable resource and support service, for no fee, for those seeking to manage the steel price risk,” said Marcus. The WSEM staff plans to work closely, when appropriate, with the staff of the American Metal Market and Metal Bulletin of London.
The WSE expects to launch its first contracts later in 2009.
