The CME Group, the world's leading derivatives marketplace, announced Friday the first trades of US Midwest domestic hot rolled coil (HRC) steel index options equivalent to 20,000 net tons (nt) (1,000 contracts), which were cleared through CME ClearPort.
Harriet Hunnable, CME Group Managing Director, Metals Products says, "Continued uncertainty about global growth and price volatility in the industry has resulted in interest in our steel futures and options products. Options in particular offer market participants a cost-effective means to manage that uncertainty and mitigate their price risk. Clearing these hot-rolled coil steel options further validates our decision to work closely with the US ferrous industry, providing them with a suite of products, like our scrap futures contract launching later this month, to meet their risk management needs."
Additionally, August represented a record month for two CME Group Virtual Steel Mill contracts, Iron Ore 62 percent Fe, CFR China (TSI) Swap futures and options. In August 2012, 1,060 swap futures and 4,010 options on swap futures contracts were cleared, equivalent to over 2 million dry metric tons.