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24/08/2007
The London Metal Exchange (LME) has today confirmed the contract specifications for the two regional steel billet contracts it will launch in April 2008. The contracts cover two regions: Mediterranean and Far East.
Both contracts are physically deliverable; the initial delivery point for the Mediterranean will be Turkey, and Far East delivery point will be South Korea.
Further details of the contracts and the LME’s approach to risk management tools for steel will be outlined in a presentation by CEO, Martin Abbott, at the 8th Conference on Status and Outlook of the Malaysian Steel Industry: ASEAN Steel Industry Conference in Kuala Lumpur, Malaysia, 27 to 28 August 2007.
Commenting on this announcement, Liz Milan, LME steel business manager said:
“I am pleased to confirm details of these first two LME futures contracts for steel. We have arrived at the specifications following extensive consultation with our members and with the physical industry, where real appetite exists for reliable price risk management tools for steel.
A constant process of two-way communication with industry, through events such as the ASEAN conference and through LME educational workshops, is essential in ensuring that these contracts are a success.”
Further details of the contract specifications are included in Appendix A.
Notes for Editors
FAQs for the steel contracts are available at http://www.lme.com/steel-faqs.asp
- Further details on the 8th Conference on Status and Outlook of the Malaysian Steel Industry: ASEAN Steel Industry Conference are available at www.misif.org.my
- The LME is the world’s premier non-ferrous metals market and achieved volumes of 87 million lots in 2006, an increase of 10.6% on 2005 figures and equivalent to $8,100 billion in monetary terms.
- Trading at the LME in non-ferrous metals and plastics takes place across three platforms: through open-outcry trading on the “Ring”; through an inter-office telephone market; and through the electronic trading platform LME Select.
- The LME is a demutualised, shareholder-owned organisation that currently operates a model in which fees are kept to a minimum and all surpluses are rebated to shareholders.
Press enquiries to: Adam Robinson +44 (0) 20 7264 5532
APPENDIX A: Contract Specifications
Mediterranean: Steel Billet Contract
1. SPECIFICATION
a) Quality
Billet supplied according to Chinese Grade HRB500 20MnSi
C: 0.17 – 0.25 %
Mn: 1.2 – 1.6 %
P: 0.045 % max
S: 0.045 % max
Si: 0.40 – 0.80 %
Cr: 0.30 % max
Ni: 0.30 % max
Cu: 0.30 % max
OR
Supplied according to Russian GOST 380- 94 5sp/ps
C: 0.28 – 0.37 %
Mn: 0.50 – 0.80 %
P: 0.040 % max
S: 0.050 % max
Si: 0.05 – 0.30 %
b) Shapes and Weights
125 x 125mm x 6,000mm or 12,000 mm
130 x 130mm x 6,000mm or 12,000 mm
150 x 150mm x 6,000mm or 12,000 mm
c) Brands
All Steel Billets delivered must be from the production of those Brands named in the LME approved list.
2. LOT SIZE
Warrant lot sizes: 65 metric tonnes (+/- 2%)
3. DELIVERY
In Free Trade Zone (FTZ) compounds, by LME approved warehouse companies. Initial delivery location: Istanbul, Turkey.
Far East: Steel Billet Contract
1. SPECIFICATION
a) Quality
Billet Supplied according to the Russian Grade: GOST 380-94 5sp/ps
C: 0.28 – 0.37 %
Mn: 0.50 – 0.80 %
P: 0.040 % max
S: 0.050 % max
Si: 0.05 – 0.30 %
OR
Billet supplied according to Chinese Grade To HRB500 20MnSi
C: 0.17 – 0.25 %
Mn: 1.2 – 1.6 %
P: 0.045 % max
S: 0.045 % max
Si: 0.40 – 0.80 %
Cr: 0.30 % max
Ni: 0.30 % max
Cu: 0.30 % max
Rebar grade Billet
b) Shapes and Weights
120 x 120 mm x 6,000 mm or 12,000 mm
130 x 130 mm x 6000 mm or 12,000 mm
150 x 150 mm x 6,000 mm or 12,000 mm
c) Brands
All Steel Billets delivered must be from the production of those Brands named in the LME approved list.
2. LOT SIZE
Warrant lot sizes: 65 metric tonnes (+/- 2%)
3. DELIVERY
In Free Trade Zone (FTZ) compounds, by LME approved warehouse companies. Initial delivery location: South Korea
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