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HKEX to Introduce its Iron Ore Futures on 13 November

Products
26 Oct 2017

  • HKEX’s first ferrous metal product
  • Screen-traded on an exchange for maximum transparency, efficiency and convenience
  • 100 per cent Trading Fee waiver and Commission Levy exemption in first six months

 

Hong Kong Exchanges and Clearing Limited (HKEX) will introduce its cash-settled TSI Iron Ore Fines 62 per cent Fe CFR China Futures (Iron Ore Futures), its first ferrous metal product, on Monday, 13 November 2017.

As a leading international financial and trade centre, Hong Kong provides one-stop solutions to enterprises for trading, financing, asset management and price risk management.  Price risk management is an indispensable capability and an area of growing need for Hong Kong.  To meet this need, HKEX announced plans for the Iron Ore Futures late last month.

The new contract will complement HKEX’s existing precious and base metals products and provide investors and risk managers with a new tool for trading, hedging and asset allocation.  As an exchange-traded product, Iron Ore Futures will provide maximum price transparency and equal access to all market participants.  By improving the price discovery process in the iron ore derivatives market, the contract has the potential to lower the cost of trading.

Key contract specifications are shown in the table below.

Fee Waiver and Levy Exemption

One-hundred per cent of Trading Fees will be waived and there will be a Commission Levy exemption during the first six months of trading.

Liquidity Providers

HKEX has invited applications for Liquidity Providers, who will be required to provide continuous price quotes.  

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 

 

 

 

1  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.  
 
In view of the index revisions noted above and to facilitate market communication and trading,  the Monthly Contracts available for trading from the launch day will comprise January 2018 and the following 23 calendar months, along with the Quarterly Contracts for the first quarter of 2018 and the following seven calendar quarters (2Q 2018, 3Q 2018, etc).

Details of the contract specifications and other additional information are available in a circular posted on the HKEX website.

 

 

Ends

Updated 26 Oct 2017

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