SMX to launch iron ore futures contract

It said the contract would be settled on the basis of Metal Bulletin Iron Ore Index, which is provided by metal bulletin, an independent information and pricing provider for the metal industries.

The Metal Bulletin Iron Ore Index (MBIOI) utilises daily price data from a broad spectrum of industry participants and through leading independent Chinese steel consultancy and widespread contact base of steel producers and iron ore traders across China.

MBIOI's tie-up makes it the world's only Index to-date with access to such data from a major Chinese partner, said SMX, the Singapore bourse of Financial Technologies (India) Ltd.

Commenting on the contract, SMX CEO Thomas J McMahon said: "It is especially strategic, given that China is the world's largest importer of iron ore and Shanghai Steelhome's data feed.

The futures market for iron ore and iron ore spot market have only recently begun to take shape and as such, both are in need of a firm reference-price mechanism.SMX is stepping into that space in the markets via a robust index upon which effective price hedging can be conducted with a strong measure of certainty."