 |
|
|
|
Iron Ore Swaps and your Risk Management:
|
|
|
With the erosion of the traditional benchmarking system for iron ore pricing – particularly
in China – demand has been growing across the iron ore market (from producers to end users)
for better tools to manage price risk.
|
|
|
While the concept of standardised Iron Ore Swap (IOS) emerged in early 2008, it was only
in April of 2009, when the Singapore Exchange (SGX) launched clearing services for IOS,
that the market became accessible to all. Since then liquidity growth has been remarkably
fast, with traded volumes rising from 160,000 tons per month in April 2009 to more than
2 million tonnes per month in January 2010.
|
|
|
Iron ore pricing indices are offered by The Steel Index (TSI), Metal Bulletin and Platt’s,
all of whom base their prices on North China delivery. The majority of contracts are
cleared – clearing services based on TSI pricing are offered by LCH.Clearnet and SGX AsiaClear.
|
|
|
|
Why CSL?
|
|
|
Having pioneered the concept of freight derivatives, CSL has also been at the forefront
of the emerging iron ore swaps market, becoming one of the first broking houses to conclude
a cleared IOS contract after its introduction in 2009.
|
|
|
Through our dedicated team of IOS brokers based in the Far East (the centre of this market)
we are able to leverage our connections in freight and commodities to create the kind of
structured strategies that clients in the industry increasingly look for.
|
|
|
For further information contact Kerry Deal in our Hong Kong office.
|
|
Dir: +852 3769 1137
Email: kerry.deal@clarksons.com
|
|