Notice to Members
Notice No. 385 08/04/2008
NYMEX to Launch Futures Contracts on Steel
The New York Mercantile Exchange, Inc. plans to introduce early in the fourth quarter of 2008 a futures contract based on prevailing market prices for hot rolled steel coil in the U.S. Midwest region (U.S. Midwest Domestic Hot Rolled Coil Steel). The contract ("HRC") will be financially settled against an index which reflects an assessment of the prevailing market prices for U.S. Midwest Domestic Hot Rolled Coil Steel. This index is developed by CRU Indices Ltd., a subsidiary of CRU International Ltd., a leading supplier of steel industry information. The contract size will be 20 short tons with a minimum price fluctuation of $0.50 per short ton and will be listed for 18 consecutive months. Final settlement on the monthly contracts will be the average price calculated for all available price assessments published for that given month. Trading and clearing access to the HRC futures contract, anticipated to begin early in the fourth quarter of 2008, is anticipated to be via the NYMEX ClearPort® and CME Globex® electronic clearing and trading platforms. The U.S. domestic steel sheet market comprises of approximately 12 major steel mills that produce annually over 50 million short tons of sheet products, with hot rolled coil representing nearly 20 million tons of this market. Physical trade in steel sheet takes place throughout the supply chain, and includes these mills, along with service centers, distributors, merchants and end users. The CRU U.S. Midwest HRC price assessments are based on actual spot transactions in this market. All the data providers available to CRU are directly involved in buying and selling the relevant steel product on the spot market.
Should you have any questions or require any further information, please contact exchangeinfo@nymex.com