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LME Steel Scrap contract sees voice-brokered first

Global – The first voice-brokered trade of the LME Steel Scrap contract was executed on May 4 by INTL FCStone Ltd on behalf of Stemcor, the exchange has confirmed.

The new additions to the LME’s ferrous suite – LME Steel Scrap and LME Steel Rebar – are claimed to have attracted considerable support from the market since their launch in November last year, with 35 990 tonnes (3599 lots) of scrap and 9600 tonnes (960 lots) of rebar having been traded to date. A new single-trade record of 1000 tonnes (100 lots) of scrap was set in the voice-brokered trade.

The new cash-settled futures contracts can be traded monthly out to 15 months and have a lot size of 10 tonnes. ‘Real industry prefers to hedge through trades quoted over the phone by their brokers, so this first voice-brokered trade shows these contracts are being accepted as risk management tools for the steel industry,’ says Matthew Chamberlain, LME’s head of business development.

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