The simulator enables those from all aspects of the steel supply chain, including producers, rerollers, the construction industry and steel merchants, to select their own requirements and to track the progress of a hedging programme through to its financial conclusion. It incorporates interactive illustrations of different hedging strategies and an explanation of key LME trading terms.
The LME steel hedging simulator can be accessed online at the following link:
Commenting on the launch, Liz Milan, LME steel project director said:
“The steel hedging simulator has been developed in direct response to interest from the physical steel industry and from the LME’s member firms. I would encourage any organisation looking to understand the process of hedging, and the potential benefits, to try out the LME steel hedging simulator. “
Background
- The LME is launching Mediterranean and Far East regional futures contracts for steel billets. Trading via a soft-launch will initially commence on LME Select and the Telephone on 25 February, Ring trading will commence on 28 April with the first prompt date on 28 July.
- FAQs for the steel contracts are available at http://www.lme.com/steel-faqs.asp
- Details of how to list product as an approved brand for delivery against an LME contract can be found at: http://www.lme.com/listing_guidancenotes.asp
- The LME is the world’s premier non-ferrous metals market and achieved volumes of almost 93 million lots in 2007, an increase of 7% on 2006 figures and equivalent to $9,500 billion in monetary terms.
- Trading at the LME in non-ferrous metals and plastics takes place across three platforms: through open-outcry trading on the “Ring”; through an inter-office telephone market; and through the electronic trading platform LME Select.
- The LME is a demutualised, shareholder-owned organisation that currently operates a model in which fees are kept to a minimum and all surpluses are rebated to shareholders.
