Singapore Exchange to Use TSI Iron Ore Index for New Contracts

PR Newswire reported that the Singapore Exchange (SGX) will be using The Steel Index (TSI) daily iron ore price index, published by Platts, as a settlement basis for new iron ore swap and sutures contracts as of Monday, March 9.

As quoted in the market news:

The SGX TSI  Iron Ore CFR China (58 percent iron fines) index futures and SGX TSI Iron Ore CFR China (58 percent iron fines) swap will both reflect the value of “58 percent iron fines”, or fine ore powder containing 58 percent iron content, as delivered to China’s Qingdao port on a cost and freight (CFR) basis.

In an announcement on January 27, 2015, SGX said the new iron ore 58 percent iron contracts will provide market participants with “more effective price risk management tools,” and enable spread trading opportunities between existing iron ore 62 percent iron contracts and the iron ore 58 percent iron contracts.

Tim Hard, TSI director for Asia, commented:

Platts and TSI operate rigorous price discovery processes in the physical metals markets, and are recognized as sources of independent and transparent data. We’re pleased that exchanges, such as SGX, recognize the benchmark value of our price indices. The new swap and futures contracts respond to the significant growth in low-grade iron ore supply and demand in the seaborne market and the increasing appetite for market participants to hedge lower grade cargoes.

Click here to read the full PR Newswire report.