Borsa İstanbul Derivatives Market (VIOP) is adding a new futures contract to its existing commodity based futures. The new Turkish steel scrap futures contracts will start being traded on VIOP on April 2^nd, 2015.

With this contract, VIOP offers an effective risk management tool for the Turkish steel industry participants in dealing with the increasing volatility of the commodity prices. Realizing one fifhts of the world imported steel scrap, Turkey is the most important market for steel scrap.

Steel scrap contracts offer a good potential as a portfolio diversification tool for the investors

Turkish imported steel scrap prices are used as reference by steel industry participants globally. This special position of Turkey in the steel scrap market necessitates the launch of a steel scrap futures contract in best serving the market participants. The contract is expected to help steel producers, consumers and other participants in managing their risk of exposure to crude, semi-finished and finished steel products, hence facilitating better decision making for production and consumption. Moreover, as a new instrument, the Turkish steel scrap contractalso offers a portfolio diversification tool for investors.

The contract will be quoted and settled in US Dollars and have a lot size of 10 metric tons

The contract, with Takasbank serving as the central counterparty, will be cash-settled based on the average of the Steel Index’s Turkish imported steel scrap prices in the previous month. The contract will be quoted and settled in US Dollars and have a lot size of 10 metric tons. Contracts with four different expiration months (current month, following month, and the nearest end months of each quarter) nearest the current month shall be traded concurrently.

Borsa İstanbul VIOP, with the central counterparty settlement facility and its ever increasing liquidity, is on its way to become the prominent hedging platform of choice in its region for investors and corporates.

For detailed information, please email to viop [at] borsaistanbul.com.