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HKEX’s First Ferrous Metal Product, Iron Ore Futures, Debuts

Products
13 Nov 2017

  • Day session volume of 1,022 contracts
  • 11 Exchange Participants traded product in day session
  • Good debut for HKEX’s first ferrous metals product  

 

Hong Kong Exchanges and Clearing Limited‘s (HKEX) first ferrous metal product, cash-settled TSI Iron Ore Fines 62% FE CFR China Futures (Iron Ore Futures) started trading today, with total volume of 1,022 contracts, equivalent to 102,200 tonnes of iron ore, during the day trading session.

As an exchange-traded product, Iron Ore Futures aims to provide maximum price transparency and equal access to all market participants by improving the price discovery process in the iron ore derivatives market. 

Liquidity Providers provided narrow continuous quotes of approximately 10 - 20 ticks (ie US$0.1 - 0.2 bid/ask spread) on screen throughout the day. 

There was healthy and diverse participation from a broad range of market participants including physical trading firms, steel mills, commodity funds, financial institutions and professional investors from Asia, Europe and the Americas.

A total of 11 Exchange Participants traded the new contract today.

To encourage market participation and initial liquidity building, HKEX announced before rollout that there would be an Exchange Fee waiver and 100 per cent SFC Levy exemption during the first six months of trading. 

Key Contract Specifications 

  Monthly Contracts Quarterly Contracts
Underlying TSI Iron Ore Fines 62% Fe CFR China Index1
  FEM  FEQ 
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 
S&P Global Platt’s (Platt's), the provider of the TSI Iron Ore FE 62% Fe, CFR Tianjin Index, will revise the specifications and calculation methodology of the index effective 2 January 2018.  For further information, please refer to the announcement in Platts’ Subscriber Notes and the details in Platts' Methodology and Specifications Guide.   

 

For additional information, please see the Iron Ore homepage under Commodities in the Product section of the HKEX website.

 

Ends

Updated 19 Dec 2017

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