HKEX Announces Plans for Iron Ore Futures
Products
27 Sep 2017
- HKEX’s first ferrous metal product, an extension from existing precious and base metals products
- Screen-traded on an exchange for transparency, efficiency and convenience
- Cash-settled in US dollars with both day trading and after-hours trading
- Monthly and quarterly contracts
Hong Kong Exchanges and Clearing Limited (HKEX) plans to introduce cash-settled TSI Iron Ore Fines 62 per cent Fe CFR China Futures (Iron Ore Futures), with rollout tentatively set for November of this year, subject to market readiness.
HKEX’s Iron Ore Futures contract will be its first ferrous metal product and will complement its existing precious and base metals products.
“With the benefits of electronic trading, our planned Iron Ore Futures will provide a transparent and efficient risk management and investment tool for physical and financial users who want to hedge their price risk or gain exposure in iron ore,” said Li Gang HKEX's Co-head of Market Development. “As the gateway to China and Asia’s trading and financial centre, Hong Kong provides top-tier professional services from corporate finance, trade finance and logistics to trading and settlement of securities and derivatives. Our Iron Ore Futures will help Hong Kong to offer more comprehensive products and services to the region’s physical trading community and financial institutions.”
Key Contract Specifications
| |
Monthly Contracts |
Quarterly Contracts |
| Underlying |
TSI Iron Ore Fines 62% Fe CFR China Index1 |
| Contract Size |
100 tonnes |
| Trading Currency |
US dollars |
| Price Quotation |
US dollars and cents per tonne |
| Contract Months |
Spot Month and the next
23 calendar months |
Spot Quarter and next seven calendar quarters (calendar quarters are January to March, April to June, July to September and October to December) |
| Minimum Fluctuation |
USD0.01 per tonne |
| Maximum Fluctuation |
None |
Trading Hours
(Hong Kong Time)
|
9:00 am to 4:30 pm (day trading session) and
5:15 pm to 1:00 am (after-hours trading session)
|
| Final Settlement Price |
Arithmetic average of all TSI Iron Ore Fines 62 per cent Fe CFR China Index values published in that Contract Month, rounded to 2 decimal places |
Arithmetic average of Final Settlement Prices of three corresponding Monthly Contracts in that Contract Quarter, rounded to 2 decimal places |
| Last Trading Day |
Last Hong Kong Business Day of a calendar month that is not a Singapore public holiday |
Last Trading Day of the last Monthly Contract in the calendar quarter |
| Settlement Method |
Cash settled contract of difference |
Details of the contract specifications are in a circular posted on the HKEX website. The circular also has details of related incentives and promotional support HKEX plans to provide.
_______________________________________________
| 1 |
S&P Global Platts, the provider of the TSI Iron Ore FE 62% Fe, CFR Tianjin Index (the “TSI-62% Index”), will revise the specifications and calculation methodology of the TSI-62% Index effective 2 January 2018. For further information, please refer to S&P Global Platts’ announcement. |
Ends