On June 22, Chicago Climate Futures Exchange (CCFE) and World Steel Dynamics (WSD) jointly announced the formation of World Steel Exchange (WSE) to list futures contracts initially for steel scrap.
According to a written statement, the contracts will trade and clear on CCFE's internet-accessible trading platform and will be based on the SteelBenchmarker family of price indices and other indices.
The WSE is expected to launch its first contracts later in 2009. The WSE venture will be supported by World Steel Exchange Marketing (WSEM), a new company. WSEM is staffed by five market experts who will constitute a valuable resource and support service.
"The trading of futures contracts on the WSE will give those involved in buying or selling steel scrap, steel products and steelmakers' raw materials the opportunity to hedge the price risk, which is a critical need given the volatility of prices in these sectors," said WSD managing partner Peter Marcus.
"We are very excited about this joint venture. The WSE fits the mission of the Chicago Climate Exchange (CCX) and the CCFE, it represents an expansion of our environmental products portfolio, and it offers a unique risk-management tool for the steel industry, scrap dealers and other market participants," said Dr. Richard Sandor, chairman and founder of CCX and CCFE.
CCFE, a wholly-owned subsidiary of CCX, is a commodity futures trading commission designated contract market which offers standardized and cleared futures and options contracts on emission allowances and other environmental products.
CCX, a US corporation, launched its trading platform in 2003. Since 2006, CCX has been owned by Climate Exchange plc, a publicly traded company.
WSD, as a strategic information service, has provided new and critical perspectives on possible steel industry pricing and other developments since 1975. WSD regularly analyzes and publishes reports on steel prices, steelmakers' costs, steel supply/demand and steel finances. In performing steel forecasts, WSD seeks to understand how the "pricing power" of steel companies the world over will be impacted by changes in the steel industry's structure.