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SGX: SGX Sees Continued Growth in Iron Ore Futures

SGX Iron Ore Futures closed 2020 at a record 2.1 billion tonnes of trade which was 30% larger than the underlying physical market. In a year of unprecedented global events, iron ore was one of the best performing of the major commodities having started the year at just over $90/MT and closing the year at nearly $160/MT, a gain of over 70% [in comparison, Gold is up 24%, Copper is up 18% and Oil is down 22%]. Iron ore’s position as the main ingredient for steel, one of the key elements of the Chinese economy, meant it was highly correlated with Chinese growth and stimulus. Thus iron ore was popular with investors as a close proxy for the Chinese economy. SGX continues to innovate and lead in this space and will implement on 25th January 2021 a tick-size change from 1-cent to 5-cents in the outright market on the electronic screen to generate greater depth and liquidity at each tick and to allow for more efficient matching through the orderbook. SGX also plans to further develop the virtual steel mill by launching a rebar contract by the end of Q1-21, giving the market further access to China-based commodities.


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