CME Group to launch Chinese Steel Rebar Swap Futures based on Mysteel index

NEW YORK (Scrap Monster): CME Group plans the Oct. 15 launch of trading in Chinese Steel Rebar HRB400 (Mysteel) Swap Futures, subject to regulatory review.

The product, which will be listed with the New York Mercantile Exchange, will be the first on a CME Group exchange based on Mysteel's price data services.

"Working closely with Mysteel, our new rebar contract allows customers who have exposure to the Chinese construction and rebar industries to manage their price risk by using the most relevant price data," said Harriet Hunnable, CME Group’s managing director for metals products.

“There is demand from industry participants to provide them with tools to help reduce the impact of price volatility throughout the steel supply chain. This product is designed to enable our regional customers to manage rebar price volatility and eliminate counterparty credit risk through a flexible, centrally cleared swap futures product," he added.

In January, CME Group and Mysteel, China's leading provider of ferrous price and indexing services, announced an agreement to develop risk-management products for the ferrous industry.

Mysteel is widely used as the benchmark settlement price index for steel mills, traders and end-users. Rebar HRB400 is used primarily by the construction industry to reinforce concrete.

The swap futures from CME Group will be equal to 100 metric tons, denominated in U.S. dollars and will be offered for trading on the Nymex trading floor and for clearing through CME ClearPort.