Singapore Exchange Ltd (SGX) plans to add two more iron ore derivatives early next year to its suite of products, targeting the lower-grade market, it said on Friday.
The new swaps and futures will be based on iron ore with 58 percent iron content, adding to the current products based on 62 percent content.
SGX, which already clears more than 90 percent of globally traded iron ore swaps, said in a statement the launch of the new products was subject to regulatory approval.
The derivatives are due to be separately cash settled against Metal Bulletin and TSI 58 percent iron ore indices.
"With the spot market for lower-grade products growing ever larger, the introduction of a high-LOI 58 percent futures contract is very timely," Henrietta Lee, managing director of Caravel Metallurgical Ltd, was quoted as saying in the SGX statement.
LOI - loss on ignition - refers to the amount of moisture and trapped volatile oxides or carbonates in the ore.
Source: Reuters
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