Reuters reported that the London Metal Exchange is considering the launch of a billet swap contract in an attempt to cash in on increasing interest in steel derivatives from industrial and financial participants.

An LME spokeswoman said that "We are looking at it following requests from the industry."

The London based metals exchange already has a steel derivative. It launched two physically backed regional billet futures contracts in April 2008, one Mediterranean and one Far East contract, which subsequently merged into the Mediterranean contract in July 2008.

It is now considering the launch of a cash settled steel contract, following the example of other exchanges such as the CME, which have seen trading volumes grow in the past few months.

Volumes of the existing LME steel billet contract rose 30.4% in the year to November, the LME said, but traders say interest in the contract from industrial and financial participants is shrinking.

(Sourced from www.reuters.com)