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Singapore Exchange to launch new high-grade iron ore derivatives

Thu 11th October, 2018 10:10am
MANILA, Oct 11 (Reuters) - The Singapore Exchange  SGXL.SI 
said on Thursday that it will launch new high-grade iron ore
derivatives in December, aiming to tap into a growing appetite
for higher quality supplies of the steelmaking raw material.
    China's anti-pollution campaign has forced steelmakers in
the world's top producer to shift to higher grade iron ore to
curb emissions, in a boon for top supplier, Brazilian mining
giant Vale  VALE3.SA .*:nL3N1W72SE
    SGX said that the futures and swaps contracts will reference
the Brazilian ore fines with 65 percent iron content index from
commodity price provider Fastmarkets MB. 
    "Increased use of high-grade iron ore as China pursues
environmentally friendly growth is creating demand for a new
risk-management tool to help market participants better manage
widening basis risks," the exchange said.
    It would be the first high-grade iron ore derivatives in the
market where the typical derivative references the index prices
based on ore fines with a 62 percent iron content.
    SGX is the world's second biggest marketplace for iron ore
derivatives in terms of volume after China's Dalian Commodity
Exchange. Iron ore derivatives traded on SGX, including futures
and options, reached 9.3 million contracts in January to
September, equivalent to 932.2 million tonnes.
    During the same period, volume traded on iron ore futures in
Dalian reached 197.1 million contracts, or 19.7 billion tonnes. 

 (Reporting by Manolo Serapio Jr.; Editing by Christian
 ((; +632 841 8972; Reuters Messaging: Twitter:
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