The Nasdaq Futures Exchange (NFX) expects to start trading in the Midwest US shredded scrap index futures in the first half of 2017. The contract will trade in 20 gross ton units with the prices settled on the 11th day of each month against the TSI Midwest US Shredded Scrap Index.
The shredded scrap futures will be the cornerstone for a suite of NFX ferrous products. At least three market makers will be making prices for the steel scrap contract on day one. The NFX is open for trading 22 hours a day from Sunday at 7:00 PM through Friday at 5:00 PM (NY time).
NFX shredded futures are expected to provide an effective price-risk management tool for the 50-60 million mt of annual US scrap consumption, over 90 million mt of annual global scrap trading, and over 200 million mt of non-Chinese steel product output each year, whose price is impacted by changes in steel scrap price. Additionally, anticipated upticks in Chinese steel scrap export tonnages in the upcoming years are expected to have a positive impact on steel scrap futures trading.