Published On: Mon, Jun 11th, 2012

SMX MBIO Index futures Trade Record Volumes in May

The Singapore Mercantile Exchange witnessed record trading volumes in the world’s first and only global Metal Bulletin Iron Ore (MBIO) Index futures contract (SMMBIO) in the month of May. With 2,564,900 tons traded on the exchange through the month, the contract has seen a surge in trading interest since its launch last August. The total volume traded in May was 25,649 lots valued at USD 350.17 million.

Less than a year into its existence, the contract has already been seen as a successful tool providing market participants with the opportunity to cover their risk exposure in times of price volatility as seen in the month of May. This is evident from the consistent growth in participation with every passing month. The contract traded daily average volume of over 100,000 tonnes in the month May, with a sharp increase of 47% from the previous high in the monthly volumes in the month of March. With growing market awareness of the SMX MBIO Index futures, which offers iron ore players with a reliable hedging instrument on a robust exchange platform, there has been added interest from the market over the past few months.

SMMBIO is the world’s first and only iron ore index futures contract on a global platform, settled based on the Metal Bulletin Iron Ore (MBIO) Index of 62% iron ore, CFR Qingdao, China. The Index is a tonnage weighted calculation of transactions normalised to a base specification using the value-in-use of the material implied by the market. The Index is made up of three sub-indices created to balance the market with equal weighting (33.3%) for each sub-index (representing Producers, Traders and Consumers, with only the final index being published). The Index is calculated daily and published at 12pm London time. Metal Bulletin’s MBIO Index is an independent and robust representation of the seaborne merchant market for sinter fines delivered to China.

The SMX MBIO Index futures contract offers an easy entry and exit at any point of time to every participant based on their position in the market and price views. The screen based trading system provides transparency and confidence to the market participants.

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