The first full year of steel futures trading on the London Metal Exchange (LME) has been very successful, according to Martin Abbott, chief executive of the exchange.
Since the launch of trading in the ring in April last year, official volumes have reached 1.5 million mt, with LME members indicating that additional, non-cleared, OTC volumes are exceeding four times those trading across the exchange platforms.
Mr. Abbot added, "The steel contracts have had a very promising start and have already traded 49 percent more volume than that of aluminum during its first year."
According to the LME statement, the key developments regarding steel futures trading at the LME include:
- Total LME trading of 1.53 million mt, almost all in the Mediterranean contract.
- The European ferrous scrap industry is beginning to price scrap at a discount to the LME price for physical supply contracts.
- SteelOrbis, Platts and The Steel Index are introducing published premiums for rebar and wire rod and discounts for ferrous scrap - referencing the LME Billet price. These will cover several locations in the US, Europe, Middle East and Asia, and include over 20 premiums and discounts.
- The mechanics of the LME warehouse model has seen extensive activity with material being delivered both in and out.