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December 02, 2008


LME to soft launch steel billet futures on February 2008

It is reported that the London Metal Exchange is to soft launch its physically deliverable steel billet futures contracts on February 25th 2008, two months ahead of the official launch date of April 28th 2007 to allow members to trade the contract on the exchange's select electronic trading system and over the phone, but stops short of permitting ring trading.

Electronic and telephone trading between members will be permitted from February 28th 2008 however the first cash settled date of July 28th 2008 remains unchanged. Initial warehouse stock reports will be available from July 28th 2008

Mr Martin Abbott CEO of LME said "We are not sure if people will use it because the official launch date remains April 28th 2008. It will be somewhat limited. It's something we've never done before but it shows that we can think nimbly and use our different platforms to launch contracts."

Ms Liz Milan of LME said that "The pre launch will allow members to trade between themselves and put early business through Select. Full trading will commence April 28th 2008 on Select, by telephone and in the ring. The first cash delivery date remains July 28, effectively five months forward.”

Ms Milan added that ""We are currently writing the procedures for brand listing. We hope to list them in the next couple of weeks. End user certification demonstrating the use of the material for a minimum one year period will be required from producers. We are not looking to test material, we can not. We will look for end user certification, test certificates and documentation from producers to push forward their listing."

She said that delivery points for the contracts remain Turkey, South Korea and Malaysia but other locations and specifications will examined as the contact matures. She said "We are open to further adjustments in order to capture liquidity and a benchmark price. We may add other grades, and perhaps other regions but of similar specifications to those in the Middle and Far East."