SGX mulls new coking coal and steel contracts, executive says

[SINGAPORE] Singapore Exchange plans to launch new coking coal and steel futures contracts, Tan Tee Yong, its head of commodity derivatives, said on Monday (Jun 15), as the exchange looks to broaden its product offerings, reflecting trade flow changes.

The steel futures contract will be for the hot-rolled coil product, typically used in the manufacturing sector, Tan told Reuters in an interview.

“As steel intensity in China reduces, we are seeing bright spots coming from India and South-east Asia,” Tan said.

SGX currently has derivatives contracts for steel reinforcing bar (rebar), typically used in construction.

India will be a factor to consider for the hard coking coal contract as trade flows have evolved with the net importer unveiling plans to expand steelmaking capacity, Tan added.

SGX has commenced talks with price reporting agencies, Tan said without naming the firms.

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He added that the development of these contracts is at an early stage and the progress is subject to discussions with related parties and regulatory approvals.

“We’re not prioritising one over the other,” Tan said. “There are key decisions we need to make. Afterwards things will move very fast.”

Separately, SGX will establish an over-the-counter gold clearing system by the end of this year, Deputy Prime Minister Gan Kim Yong told the Asia-Pacific Precious Metals Conference on Monday, as the city-state looks to establish itself as a gold trading hub. REUTERS