Leading global investment bank Deutsche Bank and global independent steel trader Stemcor have announced the forging of a strategic alliance to trade financial steel products.
Accordingly, the two organizations will offer hedging services to their combined client base via Deutsche Bank's sales and trading teams.
The alliance covers steel products and raw materials for making steel. Deutsche Bank and Stemcor are developing a business model that will leverage the skills of both parties and offer clients a structured approach to price risk management.
Commenting on the alliance, global head of metals trading at Deutsche Bank, Ray Key, said: "This agreement is another initiative to build upon our diverse metals platform. While Deutsche Bank is already a leader in the LME and CME steel contracts, as well as the OTC iron ore swap, the alliance with Stemcor expands our product offering. Clients will benefit from the synergy between the bank's financial expertise and Stemcor's in-depth knowledge of the physical steel market."
Jean-Luc Fiorenzoni, director of Stemcor Risk Management, added: "We are marrying together a world leader in commodity trading and the leading steel trader with nearly 60 years' experience in meeting the critical needs of the steel supply chain. The extremes of the past year have proved how volatile steel prices can be. Using a range of derivative tools, such as exchange traded futures and OTC swaps, our aim is to offer solutions for mitigating risk exposures and protecting operating margins."
Ray Key and Jean-Luc Fiorenzoni are both members of the LME Steel Committee.