Bursa Malaysia Derivatives (BMD) signed a licensing agreement last week with the Kuala Lumpur Tin Market (KLTM) to develop and manage a new futures tin trading contract. The Futures Tin Market (FTIN) contract will be launched on 31 October this year, with the KLTM physical tin price used as the reference price for futures trading.
The KLTM is the oldest physical tin market in Asia with 11 registered tin brands, while Bursa Malaysia is one of Asia’s largest bourses. As part of the agreement, BMD will operate and manage FTIN contracts. The agreement seeks to position Malaysia as a regional tin price benchmark and risk management centre.
The new contract will allow producers such as smelters to hedge the price of their products while tin consumers can hedge the price of their raw materials. This is particularly relevant for tin as prices tend to be more volatile due to its relative illiquidity compared to other traded metals.
KLTM Chairman, Dato’ Seri Mohd Ajib Anuar, said: “We believe that the introduction of such Tin Futures trading at this time is indeed timely, especially when we are now seeing a strong upsurge in the price of tin. There will certainly be many benefits accruing to stakeholders in the market“.
Moving forward, the two organisations plan to organise an annual metal price outlook conference, which will gather industry players, regulators and investors, to discuss on policy, development, trade and price issues faced by the industry.
