London, 21 August 2009 

The London Metal Exchange ( LME) announces that $1 billion USD in steel billet has been traded on the Exchange by industry since the contract was introduced in February 2008.  This equates to more than 2.2 million tonnes of steel billet in physical material. 

The $1 billion USD milestone was achieved in the afternoon of Wednesday, 19th August, and follows strong trading activity in July with over 3,500 contracts traded, equivalent to 229,000 tonnes of steel - a record month for LME steel billet this year.

August is also on track to be another strong month with 2,413 contracts and 156,845 tonnes of steel billet already traded during the first half of the month.

Lotta Ulfsdotter, Business Manager for Steel at the LME, comments: “Reaching this milestone demonstrates the solid foundations that the billet contract has established within the steel industry, and we are increasingly seeing the LME price referenced in the market for scrap and reinforced bar.  We continue to work on developing the contract for this important market, including the expansion of our storage locations to Western Europe, announced last month”.

The LME announced last month that it is expanding the range of its Mediterranean steel billet contract by introducing its first Western European storage location for the contract in Rotterdam, with effect from 4th September 2009.

Liz Milan, Commercial Director at the LME comments: “The LME steel billet contract provides the steel industry with a much needed risk management tool and we are therefore extremely pleased by this endorsement of the contract as demonstrated by these figures.”

Other key developments since the steel contract was launched include:

• The European ferrous scrap industry is increasingly pricing scrap at a discount to the LME price for physical supply contracts

• Construction firms are able to use the LME steel price as the reference point for rebar, as well as hedging rebar price exposure

• 100,000 tonnes of steel billet has been delivered in to LME approved warehouses since launch, with over 60,000 tonnes of steel billet delivered out – equating to 60% turnover in stock

• Members are reporting that additional, non-cleared, OTC volumes based on the LME contract spec are exceeding by a factor of four times those trading across the Exchange platforms.

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www.lme.com