The London Metal Exchange (LME) has launched two steel futures contracts covering steel billet for delivery in the Mediterranean and Far East. Initial trading is on the LME's electronic platform, known as Select, and by telephone.

Open-outcry trading for the futures contracts will start on April 28. The first cash date is July 28, with contracts out to 15 months. Lot size will be 65 tons. The initial delivery location for the Mediterranean contract will be Istanbul and Dubai, and for the Far East contract will be South Korea and Malaysia.

There has been strong opposition to steel futures trading from some major steelmakers, including ArcelorMittal, the world's largest producer. However, a leading U.S. commodities trader, Cargill of Minneapolis, is considering participation in the LME steel futures exchange, according to Bob Mann, vice-president of business development at Cargill Ferrous International, speaking to the Reuters news service.

Jean-Luc Fiorenzoni, head of steel price risk management at Stemcor, the world's biggest independent steel trader, says LME brokers have been kept busy due to the recent turmoil in financial markets. "With uncertainties hanging over the U.S. economy and the general state of financial markets worldwide, LME brokers have been kept extremely busy by volatility and high activity in the more mature base metals markets," Fiorenzoni tells Reuters.