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PrintReuters quoted brokers said this week iron ore swaps volumes rebounded in the first half of May after dropping to their lowest this year in April on the back of low volatility.
The volume of iron ore swaps cleared by the Singapore Futures Exchange in April fell to its lowest level so far this year at 3.8 million tonnes. It hit a record high, since trading began in 2008 of 7.5 million tonnes in October last year.
The April drop was mainly due to low price volatility but as prices moved out of their April range in the last couple of weeks, traders have gone back to the market.
Mr Kenny Groth a London based iron ore swaps broker at London Commodity Brokers said "April was very range bound so traders were happy to stay on the sidelines but in May we have seen better volumes so far."
He said that "I think it's the nature of the market that when volatility is low, trading volumes fall but we should see less and less of this as the market matures and the liquidity pool expands with new players getting in. Volumes should be more consistent going forward and we won't only rely on big market moves."
Brokers and traders said a steep price fall in the iron ore physical market in the last couple of weeks boosted activity in the paper market lately.
According to FIS iron ore broker Pia Marie Treloevik that in the first two weeks of May about 4 million tonnes worth of iron ore swaps were cleared. If these volumes were to be repeated in the next two weeks, May would represent a new record month for iron ore swaps volumes.（Source：Reuters）
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