The SGX Group aims to disclose trading positions on commodities including iron ore, rubber and freight on a weekly basis beginning in the third quarter to bolster transparency as more traders from outside Asia participate in the market.
In disclosing positions through commitment of traders reports, the Singapore Exchange will join bourses such as China’s Dalian Commodity Exchange and Shanghai Futures Exchange, which publish such reports daily, while the London Metals Exchange and the Chicago Mercantile Exchange do so weekly.
“We believe this is another source of information that will become quite useful for traders and managers to determine risk allocation,” Tan Tee Yong, head of commodity derivatives at the SGX Group, said in a recent interview.
“It will (also) be helpful in price formation and liquidity formation,” said Tan, adding that the exchange aims to begin the disclosures early in the third quarter.
Iron ore, a key steelmaking ingredient, will be the first commodity for which positions will be disclosed by SGX, along with or followed by rubber and freight, Tan said. SGX will disclose aggregate gross long and short positions by four categories: financial institutions, managed money, physical traders, and others, Tan said.
“When we roll out this application, we are also setting thresholds in place such that if the contract is not big enough, if the contract is not diversified enough in terms of participant base, then we will not publish it,” Tan said.
Iron ore futures and options trading volumes on SGX among participants from the United States and Europe grew 9 percentage points to 26 per cent of total traded volumes in 2023.
