December 03, 2008

LME may merge steel futures contracts – Mr Abbott

Reuters reported that London Metal Exchange could merge its two recently introduced regional steel billet contracts in the future.

The report quoted Mr Martin Abbott CEO of LME during a Metal Bulletin steel conference in London as saying that "It is quite possible that these two contracts might merge in the future. With a merger, there would be a one single global contract and the regional differences would sort themselves out via premiums in the physical market.

Mr Abbott said that "Also, at some point we might have a third contract. It is definitely not ruled out that we would add a third region LME is likely to stick with billet futures. It is unlikely that we would take away the billet. We will be trading it for many decades to come."

LME 'soft launched its billet contracts on February 25th 2008, when the trading started on electronic platform and via telephone market. LME is due to go ahead with a hard launch on April 28, when the contracts will move to open outcry trading on the floor of the Exchange.