Reuters reported that global volume of iron ore swaps may jump to 80 million tonnes by 2015 around four times last year level as interest in the hedging tool rises.
The projected volume represents nearly 13% of China iron ore imports of more than 618 million tonnes last year.
Mr Gabrielle Richou marketing director at Singapore based Iron Ore and Steel Derivatives Association said "Taking today growth and applying it as a flat rate we're looking at 80 million tonnes by 2015. This is how much potential we are seeing in this trade."
Iron ore swaps, launched in May 2008, are cash settled contracts that allow steelmakers and traders to hedge their cost after the industry abandoned a system of pricing contracts once a year in favour of a more flexible quarterly scheme.
The Singapore Exchange which clears around 95% of iron ore swaps globally saw volumes hit a record of 3.45 million tonnes in May as more steelmakers, including those from China increasingly warm up to swaps as a way of managing risks. China is the world top buyer of the steelmaking ingredient.
( Source: www.steelguru.com )