TSI ASEAN HRC-Based Singapore Exchange Steel Derivatives Well Received

SINGAPORE, March 26, 2014 /PRNewswire/ -- The Singapore Exchange's (SGX) newly introduced steel futures and swaps contracts, which were launched in February and based on the daily spot ASEAN hot rolled coil (HRC) imports price index of The Steel Index (TSI), saw solid industry support in their first month of trading.

TSI, a unit of Platts since 2011, is a leading specialist source of impartial steel, scrap, iron ore and coking coal price information based on spot market transactions. Founded in 1909, Platts is a leading global provider of energy, petrochemical, metals and agriculture information and benchmark price references.

"We're pleased to see that there was immediate industry interest in the TSI-cleared Asia steel derivatives, a testament to the market trust we've earned and the important role that TSI plays in price discovery," said Tim Hard, TSI director for Asia. "In the first 25 days, the number of lots cleared has even exceeded the level achieved for SGX's highly successful iron ore contract by 6%."

Reflecting a "pan-Asian" price, TSI's HRC Index for ASEAN imports strongly correlates with flat rolled steel prices throughout north and south Asia and also China's domestic and export prices.

According to the World Steel Association, total flat rolled steel products, which includes HRC, cold-rolled coil, galvanized and plate, account for approximately 48% of the 1.4 billion metric tons of steel consumed globally each year, with Asia being the largest market regionally.  

With last month's SGX steel derivatives launch, the Asian financial and commodities exchange now utilizes TSI physical price benchmarks as the basis for settling two series of swaps and futures contracts. Since 2009, The TSI Iron Ore 62% Fe fines reference price has been the basis for settling and clearing SGX iron ore derivatives. 

The TSI HRC Imports index takes into consideration pricing data to 10 ASEAN countries: Brunei, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam.  The pricing point for TSI's ASEAN HRC imports price index is cost and freight (CFR) Singapore. For more details on the methodology that underpins the TSI index visit https://www.thesteelindex.com/en/procedures-methodology/.

SGX is only the latest exchange to announce TSI-based derivatives contracts. LCH.Clearnet, a leading multi-asset class, multi-national clearing house for exchanges and OTC markets, and CME Clearing Europe, an independent European clearing house, utilize TSI prices in the settlement of European hot rolled coil steel contracts and Turkish scrap imports contracts, respectively. In all cases, settlement prices are the averages of TSI's reference prices published in the expiring month.

Published on a daily basis, the TSI HRC index for ASEAN imports appears in email price reports and online within the TSI Price Analyzer via subscription to TSI's Global and Steel services.

For more information on TSI, visit the website at https://www.thesteelindex.com. For more information on Platts, visit www.platts.com.

Note: Platts and its TSI unit do not sponsor, endorse, promote or sell SGX contracts.

About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets.  Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency.  Customers in more than 150 countries benefit from Platts' coverage of the biofuels, carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, shipping and sugar markets.  A division of McGraw Hill Financial (NYSE: MHFI), Platts is headquartered in New York with approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.

About McGraw Hill Financial: McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power and McGraw Hill Construction. The Company has approximately 17,000 employees in 29 countries. Additional information is available at www.mhfi.com.

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SOURCE Platts