The SMH Max Mason has cashed in on the increasing practice at Fairfax (which has today cut another 80 employees) of writing a glowing report on a junket:
…While a live price is still a few years off, the increased use of iron ore derivatives allows trades to come through more frequently in a more liquid market.
“We have now progressed from a trade once every few days to trade once every 10 minutes, on average. When it reaches a point in time when it trades once every second, when there are enough orders of small enough size, what’ll happen is, it will probably starts migrating onto screen,” Singapore Exchange senior vice president and head of derivatives Michael Syn said.
…In 2013, the Singapore Exchange (SGX), which it says accounts for 90 per cent of international iron ore derivatives clearing, cleared a record volume of 269 million tonnes of iron ore derivatives.
…”We haven’t really seen a large amount of that yet, we don’t really see a speculative or investment contract at this time, it’s still very much a fundamental risk management product, but at the right point in time when it becomes liquid enough, we believe financial users will come to the marketplace,” Mr Syn said.
The reporter was flown to the Singapore Iron Ore Forum by the Singapore Exchange.
By then I expect wider interest in iron ore prices to be waning significantly as global abundance and low prices is the new normal. But let’s not get bogged down in trivial details!
