On Apr.21-22, 2012, SteelHome held the 1st International Steel Raw Materials Supply Chain Summit in Shanghai , and around 800 delegates got together and enjoyed the presentations from industry experts.

Prakash Shah, president of metals of Singapore Mercantile Exchange, delivered a speech named Metal Bulletin Iron Ore Futures Contract.

Firstly, Prakash Shah introduced the need of iron ore heading, highlighting that iron ore is the single largest commodity in the world without a deep and liquid futures market associated with it. The collapse of annual-pricing of iron ore and market price volatility have great impact on steelmakers, iron ore suppliers and trading companies, bringing more and more demand for risk management hedging.

On August 2011, SMX and Metal Bulletin partnered to develop the world’s first iron ore futures contract to be traded in global electronic platform. Compared to OTC swap, SMX’s iron ore futures contract has following advantages:

a)       SMX Iron Ore futures contract offers a narrower Bid-Ask spread giving better pricing and trading efficiency to the iron ore physical traders and financial players.

b)      Offers easy entry and exit at any point of time to every participant based on their position in the market and price view.

c)       As the iron ore physical market is slowly moving towards spot pricing, the end of the month one day settlement of the futures contract based on the spot index is a better product for those operating in spot market.

d)      Screen based trading system provides transparency and confidence to the market participants.

Besides, SMX MBIO futures also enjoy the cost advantages over OTC swap.

Finally, Prakash Shah introduced Metal Bulletin profile and the index to the delegate.