The Singapore Exchange (SGX) and the London Metal Exchange (LME) said Friday that they are jointly developing cash-settled mini monthly metals futures contracts.
The partnership will give the LME better market penetration in Asia, which is the world’s biggest market for metals like zinc and copper. Rapid industrial growth has helped the region become a key player in the commodities futures field.
SGX will gain the distinction of being the first Asian exchange to offer metals futures priced from the LME’s global benchmark prices.
Martin Abbott, the LME’s chief executive officer, said, “We are happy to announce this exciting development. We believe this will encourage a new group of market participants in the region who will, through this collaboration and provision of mini futures contracts jointly with the SGX, benefit from local access to the LME’s globally accepted benchmark price in non-ferrous metal and steel.”
The first two contracts to be available will be the copper and zinc futures, which the SGX says will debut in the first quarter of 2011, pending regulatory approval. Demand should be high, given Singapore’s importance in the regional futures markets and the explosive pace of Chinese industrial and construction growth.
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