On Friday, the CME Group, the world's leading derivatives marketplace, announced the launch of US Midwest number one busheling ferrous scrap futures to begin trading on September 10, subject to regulatory approval. This contract will be the first ferrous scrap futures contract available to US steel industry participants, and will be listed by and subject to the rules of NYMEX.
"Today, the global steel industry relies on the S to supply more than 20 percent of its ferrous scrap needs, making it the biggest exporter of this important raw material to the industry," said Harriet Hunnable, CME Group Managing Director, Metals Products. "Continued demand for US scrap and increased price volatility in ferrous products underscore the need for an effective tool to enable price risk management throughout the entire supply chain, from raw materials to finished steel products. In addition to being an efficient risk management tool for regional industry participants, we firmly believe our US Midwest scrap futures contract has the potential to become a global benchmark for price discovery and managing volatile input prices."
The contract will be financially settled against the American Metal Market's (AMM) new US Midwest Ferrous Scrap Index and will be available for trading on CME Globex and for submission for clearing through CME ClearPort beginning with the October 2012 contract month.