The world's premier interdealer broker UK-based ICAP Plc. has announced the launch of a new broking service for global iron ore derivatives, offering market participants the ability to offset risk exposures in one of the world's leading base metal asset classes.
"Major iron ore producers and steelmakers have long had to rely on annual fixed price contract negotiations; however, the significant price swings and volatility observed in the asset class over the past 18 months has highlighted the flaws governing the long-term contract system and the inflexibility it offers prudent risk managers from both the buy and sell side. Consequently, an increasing number of physical market participants are entering into swap agreements that provide both price certainty and flexibility in a capital efficient manner," ICAP said in a statement.
"ICAP will use its electronic capabilities to provide iron ore derivative price distribution between Asia, Europe, and the Americas, providing global execution and research services to a broad spectrum of market participants," ICAP added.
ICAP is a world leader in the provision of commodity trading services including crude oil and refined products, coal, electricity, emissions, carbon emissions, natural gas, and weather derivatives. As a Category II member of the London Metal Exchange, ICAP also offers clients execution and clearing services in the wholesale base metals marketplace.