Singapore Exchange announced today that it is launching the world’s first clearing facility for OTC iron ore swaps and will use The Steel Index (TSI) iron ore reference prices for settlement.

For the first time, the iron ore sector and financial community will have the opportunity to trade Over-the-Counter (OTC) iron ore financial products without bilateral counter-party credit risk. The contract will use TSI’s 62% Fe reference price for fines delivered to China for settlement and be cleared through the Singapore Exchange’s AsiaClear platform. Clearing will begin on 27 April 2009.

The Steel Index compiles its reference prices using a rigorous and verifiable methodology, based entirely on actual spot transaction data submitted by industry participants. Its iron ore reference prices are published weekly every Friday.

“This is a landmark step in the development of price risk management tools for the iron ore sector,” says Steven Randall, Managing Director of TSI. “Singapore Exchange’s selection of TSI recognises the market acceptance of our iron ore reference price and endorses the value of our rigorous methodology.

We are delighted to collaborate with the Exchange for its settlement of iron ore swaps”.
Rising iron ore price volatility and uncertainty about future price movements mean miners, traders and steel mills are increasingly looking for tools to manage the price risks involved in selling and buying iron ore.

OTC trading of iron ore swaps began in May 2008 and has attracted widespread interest, with
significant volumes traded since then. The clearing provided by the Singapore Exchange provides the iron ore sector with the opportunity to mitigate counter-party risk in OTC trades.

Ms Elena Sng, Senior Vice President, AsiaClear and Clearing and Commodities Business at SGX said, "We are pleased to partner The Steel Index in the development of a cleared iron ore swap contract. With TSI's strong support, we seek to bring greater efficiencies to OTC iron ore market participants.”

SGX’s iron ore swap contract has a lot size of 500 metric tonnes and will be cash-settled based on the average of TSI's 62% Fe iron ore reference prices in the expiring month.

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Further information
Caroline Macmillan, Marketing Manager, The Steel Index: +44 20 7645 9413, caroline@thesteelindex.com
www.thesteelindex.com

Note to Editors:

The Steel Index Ltd (TSI) is the premier source of independent, reliable, weekly steel and iron ore price information based on actual transactions. It is the most rigorous price discovery service available for weekly global steel and iron ore prices. It is an impartial organisation that collates steel and iron ore price data for clearly specified products. Price data is submitted by steel and iron ore companies using secure web-based technology.

Weekly reference prices are then calculated using transparent and verifiable procedures.
Further information on The Steel Index, including details of product specifications and procedures, are available at http://www.thesteelindex.com/.

Singapore Exchange Ltd (SGX) was inaugurated on 1 December 1999, following the merger of two established and well-respected financial institutions - the Stock Exchange of Singapore (SES) and the Singapore International Monetary Exchange (SIMEX). SGX is Asia-Pacific's first demutualised and integrated securities and derivatives exchange and is listed on its own bourse. The exchange's stock is a component of benchmark indices such as the MSCI Singapore's Free Index and the Straits Times Index (STI).

SGX aims to offer a highly trusted, comprehensive and efficient securities and derivatives marketplace for raising capital, risk transfer, trading, clearing and settlement. SGX facilitates the trading and clearing of commodity futures and over-the-counter (OTC) derivatives such as forward freight agreements and oil swaps. Through strategic alliances and partnerships with other exchanges around the world, SGX is firmly positioned as an Asian Gateway.

For more information, please visit SGX website: www.sgx.com