The London Metal Exchange has today confirmed that it will commence futures trading in steel billet in April 2008. There will be two regional contracts, one for the Near East and one for the Far East.

Today’s announcement is the first part of the LME’s offering of price risk management tools to the steel industry and it follows a period of extensive consultation with LME members and physical industry.    

Commenting on this major development, Martin Abbott LME chief executive said:

 “There are many ways in which price risk management tools can be delivered to the steel industry. Our physically-delivered steel billet contracts are the first, of what could be several, steel contracts offered by the LME. In providing this service we are building on the credibility and experience that we have developed in over 130 years of base metals trading and physical delivery, as well as the vast knowledge and distribution mechanism represented within the LME member firms”.

Liz Milan, LME steel business manager added:

“Like all contracts the steel billet contracts will take time to build but there is a real appetite for this offering from our members, their clients and from those in the steel industry who already recognise the value of price risk management tools. For those that don’t yet see the benefits, the LME will commence a thorough programme of education.”

Click here to view frequently asked questions about the new contracts.

Notes for Editors

1. 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.  
2. 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.
3. 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:       Anna Campopiano + 44 (0) 20 7264 5689