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| LME creates single steel billet contract for global industry - 30 Jul, 2010 | ||
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The London Metal Exchange announced that it has completed the merger of its Mediterranean and Far East steel billet contracts into a single global contract. The new contract recognizes steel as a global industrial commodity. Since the decision to merge the two contracts was announced in December 2009, trading in the LME’s Mediterranean contract has surged, up 385% YoY in the first 6 months of 2010. To July 27th 2010, 72,202 lots have been traded this year equivalent to 4.7 million tonnes and USD 2.2 billion. The strong increase in trading volume, as well as a marked increase in open interest, since the start of the year, reflects the important role of the LME as a venue for transparent price discovery, risk management and inventory financing. With the contract’s broadened global focus and importance to the construction industry, LME steel billet has also come to be seen by many commentators and analysts as a leading economic indicator. To further support this market, LME is also expanding its network of storage facilities and delivery locations. In June 2010, the board of directors resolved that LME would list New Orleans as a good delivery point for the global steel billet contract with effect from July 29th 2010 and the LME is considering several other locations in Europe and the USA. Mr Chris Evans head of business development at the LME said that "The decision to merge the two steel contracts into one has been met with a very strong response by the industry worldwide. The addition of New Orleans as a US delivery location will undoubtedly add further momentum, while post recession growth will encourage new demand for transparent price referencing and risk management." | ||
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