Published On: Sun, Apr 28th, 2013

SGX Clears First AsiaClear Iron Ore Futures Trades

Magnus Bocker CEO of SGX

Magnus Bocker CEO of SGX

We are pleased to announce our first SGX AsiaClear Iron Ore Futures trades done on 24 April 2013. The two trades with a total of 200 lots (20,000 mt) involving Barclays Bank, Deustche Bank and Trafigura and brokered by Freight Investor Services and London Commodity Brokers, were matched and cleared using SGX’s block trade facility known as Negotiated Large Trades (NLTs).

As market leader for iron ore derivatives, SGX has been working closely with global market participants operating under different regulatory regimes to introduce products that meet their iron ore risk management needs and those of their clients.

The SGX AsiaClear Iron Ore Futures contract is fully fungible with the SGX Iron Ore Swap contract. Customers with offsetting positions in swap and futures will enjoy margin offset. This multi-instrument model limits any fragmentation of liquidity for the iron ore derivatives market.

In addition to swap and futures contracts, the SGX AsiaClear Iron Ore Option contracts introduced in September 2012 have also received strong support from market participants. Close to 10,000 lots (4.98 million mt) of SGX Iron Ore Option contracts were cleared in 2013 so far, accounting for more than 75% of the global market. Open interest also reached a high of 9,154 lots (4.6 million mt) on 24 April 2013, representing 54% of the global market. This attests to SGX being the main clearing venue for iron ore derivatives.

Customers who clear iron ore futures, swap and option positions in the same clearing account with an SGX Clearing Member also enjoy portfolio margin savings.

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