ICEX sees more physical market players for iron ore contract

Mumbai, Jan 30 (PTI) Indian Commodity Exchange (ICEX),which launched world''s first iron ore futures (IOF) contracton Saturday, expects more physical market participants usingits platform for effective risk management and hedgingactivities.

The city-based ICEX has established strong connectwith the physical market participants such as miners,manufacturers, importers and exporters and they haveparticipated actively in trading, as well as taken lead todevelop iron ore contract, officials said.

"In coming days we shall see more physical marketparticipants using ICEX platform for effective risk managementand hedging activities. This is possible due to our contractmeeting international standards and transparency in pricediscovery, which is reflective of the present trade in India,"ICEX Chief Executive Officer Sanjay Chandel said.

"We are sure the IOF contract, the first of its kindin the world, will benefit the industry at large by giving ita very strong alternative to other products they were usinginternationally. We feel proud that the thought leadershiptowards this indigenous product is being appreciatedglobally," he said.

Iron is the world''s most commonly used metal of whichiron ore is the key ingredient. 98 per cent of the iron oreextracted is used to make steel. It is used primarily instructural engineering applications, maritime purposes,automobiles, and general industrial applications.

India is world''s 3rd largest producer of iron ore. Itproduced 257 million tonnes of iron ore in 2010 and exportedover 115 million tonnes. .