What has happened in the market environment which makes this a good time to create a global contract?
The global economy has experienced immense changes of late and we have seen traditional regional trade flows have increasingly been breaking down as producers are exporting material further afield, creating globally homogenised billet prices. The introduction of a global LME steel futures contract will create a single reference price, where steel industry participants can increasingly use the LME billet price as their benchmark, for example, construction companies from the USA to China will be able to buy physical rebar using the LME billet price as their benchmark. A global contract will also enable users of the market to swap physical billet inventories between different regional warehouse locations, helping them to cut costs and time taken to ship billet.
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