Nymex opens hot-rolled steel coil futures trading
By Tom Stundza -- Purchasing, 11/13/2008 2:00:00 AM
The New York Mercantile Exchange (Nymex) began trading a futures contract on hot-rolled steel sheet in coil in late October, based on a Midwest market price index developed by CRU Group's U.S. office in Wexford, Pa. "Nymex's expansion into the steel market is a natural extension of our risk management business," says Richard Schaeffer, chairman of the futures exchange. "Managing price volatility has become a necessity for everyone involved along the steel supply chain and these contracts will assist the U.S. manufacturing industry in dealing with this issue."
The contract size will be 20 net tons with a minimum price fluctuation of 50¢/ton and will be listed for 18 consecutive months. The steel futures contract will be available for trading on the CME Globex electronic trading platform of Nymex parent, CME Group, and off-exchange transactions can be submitted for clearing via Nymex ClearPort.
The London Metal Exchange, the world's largest nonferrous marketplace, began trading in steel billet futures earlier this year. Most steelmaking firms still shun the idea of steel futures because they are reluctant to give up their pricing power and have snubbed the LME steel exchange. A recent Reuters News Service story says that, "with major producers snubbing the idea, a mature and liquid market is still years away."
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