Steel Billet Trading Commences On The LME

Trading in two steel billet futures contracts; Mediterranean and Far East, commenced today on the London Metal Exchange (LME). Trading is available initially on the Exchange’s electronic platform, LME Select, and on the Telephone market. Open-outcry trading via the LME ‘Ring’ will commence on 28 April with the first prompt date on 28 July.

From the soft-launch, the Exchange will begin publishing daily evaluated steel prices and open interest volumes for both contracts. From 28 April, the full suite of LME market data including official and unofficial prices, open interest and warehouse stocks will be available.

Commenting on the launch, Liz Milan, LME steel project director, said:

“The purpose of the soft launch is to generate a build-up of liquidity in advance of the full launch in April. It also enables those new to the concept of futures to understand the different types of steel price and contract data that will be published by the Exchange.”

Background

1. FAQs for the steel contracts are available at http://www.lme.com/steel-faqs.asp
2. Proposed delivery locations for the Meditearranean contract are Dubai and the Marmara Region in Turkey; for the Far East contract the proposed delivery locations are Incheon, South Korea and Johor, Malaysia.
3. 11 steel brands have been approved for delivery against each of the steel billet contracts.
4. 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
5. LME market data will be available via the LME website: www.lme.com/dataprices.asp, via LMElive: http://www.lmelive.com/ and via approved LME data vendors.
6. 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 Structure – Summary

The prompt date structure for the steel contracts will be identical to LME non-ferrous metals contracts with prompt dates out to 15 months as for Lead and Tin.

1. Soft Launch – 25 February 2008

• Trading: Telephone and SELECT only
• First tradable prompt: Third Wednesday, 20 August 2008

2. Hard Launch – 28 April 2008

• Trading: Ring, SELECT and Telephone
• First tradable prompt: 3 Month date, 28 July 2008
• Officials/unofficial published for 3M and 15M
• Ring trading times: 3 Rings - 11:40 -11:45, 13:05 -13:10 and 15:30 -15:35
• Both contracts will trade simultaneously in each Ring
• Future outright and carry contracts will be permissible
• Options and TAPOS will not be allowed initially. 

Translations

 

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