CME Group, the world's leading and most diverse derivatives marketplace, today announced the launch of North European Hot-Rolled Coil Steel (Argus) Futures, to begin trading on March 9, 2020, pending all relevant regulatory review periods.
"Given the high level of uncertainty and increased regional volatility in steel markets, we have seen a growing demand for risk management tools from customers throughout the steel supply chain," said Young-Jin Chang, Global Head of Metals Products, CME Group. "As we continue to experience strong growth across our expanding ferrous product suite, we are pleased to provide steel mills, service centers and other market participants a new way to price and manage their exposure to changes in regional steel prices."
"This new hedging tool for the North European HRC market is very timely given the increase in volatility of European steel prices," said Lee Kirk, managing director of Cargill's metals business. "This contract benefits the ferrous industry as a whole and provides us an opportunity to work and create value with our customers across Europe so that they can focus on what really matters."
North European Hot-Rolled Coil Steel (Argus) Futures will be financially settled based on a price assessment published by Argus Media each business day of the contract month. The futures will be quoted in Euros per metric ton and have a contract size of 20 metric tons. The first listed month will be the March 2020 contract, with a further 11 consecutive months available for trading – out to February 2021.
"We are delighted that CME Group has chosen Argus as the settlement price for its HRC North European contract. As a leading provider of pricing for hot-rolled coil steel, Argus recognizes the importance of bringing transparency to a market that is critical for industries ranging from automotive to drum manufacturing," said Adrian Binks, chairman and chief executive of Argus Media.
Ferrous metals futures and options trading volumes have increased more than 35 percent during 2019 reaching a new record volume of 251,999 contracts traded. Open interest reached 22,320 contracts at year-end 2019.
The new futures contract will be available for trading on CME Globex and for submission for clearing via CME ClearPort, and will be subject to the rules and regulations of COMEX. For more information on CME Group's ferrous metals product suite, please visit: www.cmegroup.com/trading/metals/ferrous
