Hong Kong Exchanges and Clearing Limited‘s (HKEX) first ferrous metal product, cash-settled TSI Iron Ore Fines 62% FE CFR China Futures (Iron Ore Futures) started trading today, with total volume of 1,022 contracts, equivalent to 102,200 tonnes of iron ore, during the day trading session.
As an exchange-traded product, Iron Ore Futures aims to provide maximum price transparency and equal access to all market participants by improving the price discovery process in the iron ore derivatives market.
Liquidity Providers provided narrow continuous quotes of approximately 10 – 20 ticks (ie US$0.1 – 0.2 bid/ask spread) on screen throughout the day.
There was healthy and diverse participation from a broad range of market participants including physical trading firms, steel mills, commodity funds, financial institutions and professional investors from Asia, Europe and the Americas.
A total of 11 Exchange Participants traded the new contract today.
To encourage market participation and initial liquidity building, HKEX announced before rollout that there would be an Exchange Fee waiver and 100 per cent SFC Levy exemption during the first six months of trading.
Key Contract Specifications
| Monthly Contracts | Quarterly Contracts | |
| Underlying | TSI Iron Ore Fines 62% Fe CFR China Index | |
| FEM | FEQ | |
| Contract Size | 100 tonnes | |
| Trading Currency | US dollars | |
| Price Quotation | US dollars and cents per tonne | |
| Contract Months | Spot Month and the next 23 calendar months | Spot Quarter and next seven calendar quarters (calendar quarters are January to March, April to June, July to September and October to December) |
| Minimum Fluctuation | USD0.01 per tonne | |
| Maximum Fluctuation | None | |
| Trading Hours (Hong Kong Time) |
9:00 am to 4:30 pm (day trading session) and 5:15 pm to 1:00 am (after-hours trading session) |
|
| Final Settlement Price | Arithmetic average of all TSI Iron Ore Fines 62 per cent Fe CFR China Index values published in that Contract Month, rounded to 2 decimal places | Arithmetic average of Final Settlement Prices of three corresponding Monthly Contracts in that Contract Quarter, rounded to 2 decimal places |
| Last Trading Day | Last Hong Kong Business Day of a calendar month that is not a Singapore public holiday | Last Trading Day of the last Monthly Contract in the calendar quarter |
| Settlement Method | Cash settled contract of difference | |