United States – Derivative marketplace and risk management specialist CME Group plans to launch a steel scrap futures contract on September 10. According to the group, it will be the first such option available to US steel industry participants.
The contract will be based on the American Metal Market (AMM) index for US Midwest prices for No 1 busheling and will be listed by and subject to the rules of NYMEX. Such a tool is necessary given that today’s global steel industry ‘relies on the US to supply more than 20% of its ferrous scrap needs’, argues Harriet Hunnable, CME Group’s Managing Director, Metals Products.
‘Continued demand for US scrap and increased price volatility in ferrous products underscore the need for an effective tool to enable price risk management throughout the entire supply chain, from raw materials to finished steel products,’ Mrs Hunnable adds.
According to CME, the contract will be available for trading on CME Globex and for submission for clearing through CME ClearPort as of October 2012.
For more information, visit: www.cmegroup.com
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