London 25/07/2016 - A new global spot physical metal trading platform called Metalprodex will launch in September, managing director Janko Linhart told FastMarkets.
Headquartered in Germany, it has been developed to allow the quick purchase and sale of physical metal.
All metal is delivered physically within two days on the spot market. Metal delivered into any Metalprodex-approved warehouse can then be sold or bought instantly via electronic trading platform MTPX.
Once a deal has been completed, it is then in 'lockdown' until the seller receives the money from the buyer.
The platform will allow direct market access for participants to place buy or sell orders in real time at an all-in trading price, denominated in euros.
"This is a move for us to provide easy access to a global community of approved and trusted metal traders. Importantly, metal cannot be short-sold on MTPX. Therefore all sales are backed by physically available material. There is no other physical metal exchange and it is clear that there is a demand for one," Linhart said.
Metalprodex will initially focus on four base metals - aluminium, lead, copper and zinc - and will also trade semi-finished products in the near future. Metal will be traded in standard 25-tonne lot sizes.
Due to the platform's physical nature, price development will be distinct to each location, with members calculating the all-in cost.
"It is important to enable regional trading so you can set a price because each region has a different demand level and varying logistics and finance costs," he added.
Metalprodex has already received interest from major participants amongst producers, consumers, traders as well as warehouses, Linhart said. Indeed, the company has already agreed with C.Steinweg, which boasts a large global warehousing footprint, to provide warehousing services in various locations.
The initial focus will be on Europe, with key locations in Rotterdam, Hamburg, Szczecin, Barcelona, Genoa and Istanbul. Then it will look to expand into the Middle East and India.
Due to market synergies, Linhart said that there is a possibility of tie-ups with other exchanges, while further new products and locations are expected in due course.
"That's the benefit of being a spot market. We can be quick with new initiatives," Linhart said.
(Editing by Mark Shaw)