LME to begin partial steel futures trade by end Feb

Speaking at the Steel Success Strategies Conference in Paris, LME's Martin Abbott said they would commence partial trading in steel futures by late February.
 
Abbott emphasized that the volume of non-ferrous metals trading at LME has been about 30 times the volume of physical trading. He added that he thought the steel futures hedging mechanism at LME would also include scrap and rebar as well as billet trading, due to the nature of the business. Taking into consideration the sum of 30 times the physical trading volumes of scrap, billet and rebar, Abbott said that LME would be able to host a lot of trading, which would also mean a big change for LME.
 
In response to a question on why Dubai has been chosen as a delivery point for the Mediterranean futures contract even though there is no significant billet supplier in the Gulf region, Abbott said they wanted to be in an area of net consumption, and to have the steelmakers make at least some effort to get the steel near to customers in case they wanted to deliver the billet to an LME warehouse.
 
LME will be launching two futures contracts covering steel billets; a Mediterranean contract with the delivery points being Turkey and Dubai, and a Far Eastern contract with the delivery points being Malaysia and South Korea.