The NASDAQ OMX Group, Inc. and World Steel Exchange Marketing, LCC (WSEM) founded by World Steel Dynamics (WSD) in 2009, announced Monday a new partnership to develop financially settled steel and steel scrap futures products to be traded on the NASDAQ OMX Futures Exchange, Inc. (NFX). The partnership is aimed to help the steel industry better manage steel price risk and is expected to launch in Q4 of this year following filing with the Commodity Futures Trading Commission.
These new futures contracts will be financially-settled monthly against WSEM's SteelBenchmarker Pricing System and listen on NFX, a public futures exchanged. According to a press release, the "transparent and regular pricing will allow market participants to manage their rise on short-, medium- and long-term contracts. Investors interested in exchange-traded steel futures will benefit from a forward pricing curve to judge hedging opportunities, which also allows for timing flexibility on forward price commitments."
Peter Marcus, CEO and Founding Partner of WSEM, said "We are pleased to create a steel futures marketplace with NASDAQ OMX that, when properly harnessed, will help steel mills enhance profit margins and steel buyers achieve competitive advantages."
After the launch of the initial US steel futures products, NFX plans to continue to expand its offering with additional products, such as European and world export market steel futures.