Nymex To Launch Domestic Hot Rolled Coil Steel Futures In 4Q
Last update: 8/4/2008 8:39:38 AM
DOW JONES NEWSWIRES
The New York Mercantile Exchange announced it plans to start offering steel futures, with a hot-rolled coil contract set to be unveiled early in the fourth quarter.
Nymex Holdings Inc. (NMX) Chairman Richard Schaeffer said the contracts will help the U.S. manufacturing industry deal with steel's volatile prices. He added the expansion "into the steel market is a natural extension of our risk-management business."
Hot-rolled steel, a basic steel product that is further
processed to make final products such as automobiles and appliances, represents nearly 20 million tons of the 50 million in short tons of sheet products produced annually.
The contracts will be settled against an index developed by CRU Indices Ltd., a subsidiary of steel-information provider CRU International Ltd. The size of the contract, which will be listed for 18 consecutive months, will be 20 short tons with a minimum price fluctuation of 50 cents per short ton. The contract will be available for trading on the CME Globex electronic trading platform.
While the price of steel reached historical highs earlier this year amid strong demand in China, India, Russia and other emerging markets, the prices have softened in the past few weeks.
In recent weeks, two banks, Credit Suisse Group (CS) and Deutsche Bank AG (DB), started an over-the-counter iron-ore exchange, which offers one of the first windows into the largely secretive and guarded world of iron-ore trading - a basic steel ingredient. Unlike buying other commodities, such as copper, aluminum or gold, iron-ore trading has been opaque for decades.
Shares of Nymex closed Friday at $78.25 and there was no premarket activity.
-By Jennifer Hoyt, Dow Jones Newswires; 201-938-2474; jennifer.hoyt@dowjones.com |
