The NASDAQ OMX Group Inc. (NFX), New York, and World Steel Exchange Marketing LLC (WSEM), founded by World Steel Dynamics, Englewood Cliffs, N.J., have formed a partnership to develop financially settled steel and steel scrap futures products that will be traded on the NASDAQ OMX Futures Exchange Inc.
The two companies say they hope the partnership will help the steel industry better manage steel price risk with a trading platform and a full complement of steel futures products.
The program is expected to launch by the fourth quarter of 2013 following a filing with the Commodity Futures Trading Commission. The futures contracts will be financially settled monthly against WSEM’s SteelBenchmarker Pricing System and listed on NFX, a public futures exchange that provides a method to trade steel.
“We are pleased to create a steel futures marketplace with NASDAQ OMX that, when properly harnessed, will help steel mills enhance profit margins and steel buyers achieve competitive advantages,” says Peter Marcus, CEO and founding partner of WSEM.
Marcus continues, “We bring unparalleled industry relationships, deep regional and global marketplace knowledge, hands-on applications expertise, best practice benchmarking, awareness of what causes sleepless nights for steel buyers and sellers, robust price indices and a deep love for the industry and all of those with whom we interact.”
The companies say that after the launch of the initial U.S. steel futures products, NFX will expand its offering with additional products, such as European and world export market steel futures.
Eric Noll, NFX executive vice president of transaction services for the United States and the U.K., says, “As we expand our footprint in the derivatives space, our U.S. futures platform will allow NASDAQ OMX to offer member firms new trading opportunities in various products, including metals.”
Daniel Carrigan, president of NFX, says, “We’re thrilled to partner with WSEM as we look to develop a robust product suite of steel futures, which leverages our INET trading platform and the NASDAQ OMX Data Center for efficient execution across asset classes.”