India Commodity Exchange founded by Indiabulls Financial Services and the state run MMTC plans to start iron ore futures, making it the country’s first bourse to allow trading in the steel making raw material.

The report quoted Mr Sanjay Chandel CEO of India Commodity Exchange as saying that “Going forward, we would add many more contracts that are unique or new to the market. Iron ore is one which we are working on very seriously.”

Mr Chandel said that “The planned futures will be used by miners, traders and users the whole value chain we want to get in. We did it primarily because our partner is one of the largest traders and they have a very good connect with the physical market in iron ore in India.”

Mr Chandel said that “We expect to grow from those contracts rather than running after turnover for the time being.”

He added that trading in iron ore futures is subject to approval and will begin two months after the Forward Markets Commission the industry regulator approves the product.

According to its website, the India Commodity Exchange wants to add new contracts to the 17 commodities currently on offer. Average daily turnover may advance to at least INR 4,000 crore to INR 5,000 crore by the year ending March 31, 2011, from about INR 2,000 now.

The India Commodity Exchange, which started operations in November, competes with the Multi Commodity Exchange of India the nation’s largest such exchange for a share of the country’s INR 7765,000 crore commodity futures market. India is the third largest iron ore producer.

(Sourced from BS)