22 April 2018
visit www.nextgenbanking.co.uk

LCH.Clearnet taps TSI iron ore price for cleared swaps

18 May 2009  |  2088 views  |  0 Source: LCH.Clearnet

LCH.Clearnet has confirmed it will launch its cleared OTC iron ore swap contract using exclusively The Steel Index (TSI) iron ore reference price for settlement.

"We are delighted to provide LCH.Clearnet with the index for its settlement of cleared iron ore swaps. Its selection of TSI's iron ore reference price confirms our index as the industry standard." says Steven Randall, Managing Director of TSI. "The growth potential in iron ore swap trading is enormous. In 2008 physical shipments of iron ore exceeded 800 million tonnes, with more than 40% sold into China on a spot price basis."

This move by LCH.Clearnet follows the successful launch of a cleared iron ore swap contract on 27th April 2009 by the Singapore Exchange, which also chose exclusively The Steel Index iron ore reference price for settlement.

TSI's iron ore reference price has won widespread industry support due to its rigorous and verifiable methodology. Index prices are based entirely on actual spot transaction data submitted by industry participants.

Rising iron ore price volatility and uncertainty about future price movements mean miners, traders and steel mills are increasingly looking for tools to manage the price risks involved in selling and buying iron ore. LCH.Clearnet's clearing of OTC iron ore swap contracts based on TSI's prices will enable traders to mitigate bilateral counter-party credit risk.

Isabella Kurek-Smith, Director Energy and Freight at LCH.Clearnet said "As one of the leading providers of price information for key steel products globally, TSI was a natural choice for LCH.Clearnet. With our specialist OTC clearing services and TSI's reliable reference prices, the iron ore swap market now has the opportunity to evolve into a key derivatives market."

The cleared contract uses TSI's 62% Fe iron ore reference price for fines delivered to China for settlement. It is cash-settled on the average of the iron ore reference prices published in the expiring month.

Comments: (0)

Comment on this story (membership required)

Related company news


Related blogs

Create a blog about this story (membership required)
Visit http://response.ncr.comvisit www.ebaday.comVisit www.nextgenbanking.co.uk

Top topics

Most viewed Most shared
Top tier banks pass first transactions on trade finance blockchainTop tier banks pass first transactions on...
11478 views comments | 20 tweets | 27 linkedin
TransferWise becomes first non-bank to open settlement account with BofE RTGSTransferWise becomes first non-bank to ope...
10074 views comments | 18 tweets | 32 linkedin
Revolut launches spare change savings toolRevolut launches spare change savings tool
9900 views comments | 14 tweets | 19 linkedin
Barclays Bank sets up tech venture unitBarclays Bank sets up tech venture unit
9145 views comments | 16 tweets | 22 linkedin
Goldman Sachs acquires PFM startup Clarity MoneyGoldman Sachs acquires PFM startup Clarity...
8534 views comments | 9 tweets | 10 linkedin

Featured job

Basic c. EUR 90K OTE c. EUR 180K plus full bene...
Paris (preferred) or London

Find your next job