The London Metal Exchange's Far East and Mediterranean billet futures contract will be merged into one global steel futures contract around April or May 2010, said ceo Martin Abbott.
Speaking at an LME press briefing in London he said the LME will be the only venue offering a global steel futures contact for billet.
“There has been a massive weight of trade on the Mediterranean billet futures contract and it made sense to merge the two contracts to one global steel futures contract. The lack of volumes on the Far East contract should not be seen as negative it just means that people are using the Mediterranean contract because it has more liquidity,” said Abbott.
He added: “This is something that will definitely happen, it’s a done deal. We just have to makes changes to the IT systems and allow our members to change their systems.”
According to Abbott 2009 was a ‘good year’ for the steel futures contracts and it showed signs of growth.
Since launch through to December 11 last year the Middle East billet contract traded 42,146 lots. The Far East contract traded only 3,191 lots in the same period.
“2009 was a positive year for the steel futures contracts. The trends we saw in last year suggest that we will have another good year in 2010. It’s difficult to give forecasts but a 2-5% growth in trading volumes would not be a surprise.”