Active Start to LME-SGX's Mini Metals Futures


"Singapore Exchange's metal futures outstrip those of LME in January."

The Singapore Exchange launched its small-sized, cash-settled metal futures with the London Metal Exchange on Tuesday with volumes on the first day outstripping those of the LME's own minis products for the whole of January.

Some 635 lots of the new LME-SGX copper futures were traded, 471 of aluminum and 433 of zinc, according to Reuter's data.

"It is too early to say but I think there will be demand," said VTB Capital Analyst Andrey Kryuchenkov. "Chinese and Asian investors love these types of contracts, which allow speculative trading."

By comparison, January volumes of the LME's copper mini contract, launched along with aluminum and zinc futures contracts in December 2006, were 273. Aluminum had no trades and zinc had three.

"I am aware of these new mini contracts, not a great deal of notice is being taken here yet," one London-based trader said on Monday, adding the main market would take notice only if the new products started to influence the main contracts. The mini contracts allow exposure for retail investors to the commodities market. Each lot consists of 5 tons, compared with 25 tons for benchmark copper, aluminum and zinc.

The SGX and LME said in a statement on Tuesday the new futures would "provide retail investors in Asia and beyond easy access to global metals markets," and that they had attracted strong interest.

Three market makers—GS Energy Partners LLC, Susquehanna Pacific Pty. Ltd. and a market maker from the Asia Pacific—and 20 active traders had signed up to the initiative, the statement said. It did not name the third market marker.

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