Cleartrade Exchange launches liquidity scheme for Iron Ore Derivatives

Get aggressive discounts on execution fees.

In a release, Cleartrade Exchange (CLTX), the Singapore Regulated Futures Exchange, announced the launch of a new scheme for its members, offering discounts on existing execution fees in return for an upfront volume commitment. The offer is limited to a total volume of 20 million tonnes and is available to all existing and joining Cleartrade Exchange members.

“This unique offer allows organisations to allocate a given volume of their Iron Ore derivative exposure for execution on the Cleartrade Exchange for a low fixed fee, which includes central counterparty costs,” explained Richard Baker, CEO of Cleartrade Exchange. “Once members have committed to the scheme they are able to trade up to the volume limit at any time within a 12 month period.”

Members will have one month to commit to the scheme, after which execution fees will revert to the standard Cleartrade Exchange price book; discounts of this magnitude will not be available again for another year. Organisations can buy volume in five hundred thousand, one million or two million tonne tranches, all priced at slightly different levels.

Scott Sweden, Business Development for Metals at Cleartrade Exchange, said: “Many of our members are either accessing the ferrous derivatives space for the first time or are growing their presence in this market. In both cases the trading costs can be a factor: by providing these organisations with a low USD/tonne rate for a defined and limited volume CLTX is assisting them in accessing and growing their participation in the market. Because of these factors we have designed this initiative to be as attractive and accessible to our smaller Iron Ore trading members as it is to organisations with larger exposure.”

Cleartrade Exchange members will be able to buy into the new scheme during April and will have until the end of March 2014 to execute on their committed volume.

The Iron Ore derivatives market is centred in Singapore, with the majority of trading conducted during the Asia business day. The market is growing quickly, with 2013 full-year volumes forecast to be between 160 million and 190 million tonnes. So far in 2013 an average of over 600,000 tonnes has been traded daily; the total current open interest exceeds 14 million tonnes.