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SSS Europe 2007

Steel Success Strategies -- Europe V

 
 

SBM versus other Indexes

Steel futures contracts that are settled using a physical market price opinion index such as the SteelBenchmarkerTM are different from other financially traded metals.

SBM Viewpoint

The concerns that have been expressed about the loss of mill pricing power and the fear of speculator driven price volatility are based on the trading experience from other metals. These concerns appear to be overstated.

The final settlement price that is used in financial swaps and the upcoming NYMEX steel futures contracts is determined by the price opinions of only physical market participants. Speculators are not involved in the determination of the final settlement price in the trading of these steel futures contracts unlike their involvement in other metals futures contracts.

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