The London Metal Exchange will merge its Mediterranean and Far Eastern Steel Billet Futures, to create what it called the first global, physically delivered steel futures contract.
The LME said the merger, which it plans to achieve by April 2010, would create “a concentration of liquidity into a single price benchmark with multiple delivery options [that] offers the steel industry the best flexibility in managing price risk.”
The London-based exchange said the new single steel contract would enable users of the market to swap physical billet warrants between different regional warehouse locations. They would also enjoy more favourable levels of finance because they would...