February, 2025- Q: What is Marex’s history and role in the metals markets?
A: Marex has a long heritage in metals. We launched as a metals and energy broker in 2005 and now help clients access markets across ferrous, base, precious and battery metals. Having been a Category 1 LME member for over 15 years, we’ve developed a reputation for being a go-to counterparty. We help clients trade even in the most turbulent markets. Listing on Nasdaq in 2024 has brought advantages to our balance sheet and given our clients comfort that we can support them as they grow. As a listed non-bank, we now combine the financial firepower of a bank with the market savvy and personal touch of a broking partner.
Q: What are the ferrous contracts that Marex trades, and what types of companies use these contracts?
A: The ferrous derivatives market spans multiple global exchanges, each offering products that cater to specific market needs:
• The Singapore Exchange (SGX) provides iron ore futures and options contracts in various grades (58 percent, 62 percent and 65 percent).
• The London Metal Exchange (LME) offers FOB China hot-rolled coil futures, Turkish HMS 80/20 futures, and Turkish rebar futures.
• The Chicago Mercantile Exchange (CME) features U.S. hot-rolled coil futures and options, Chicago busheling futures and options, and Northern European hot-rolled coil futures and options.
These instruments serve a wide range of market participants, including service centers, fabricators and steel producers, who use them to manage price risks in their operations.
Q: How do market participants benefit from established clearing members in the marketplace?
A: As a Category 1 LME member and with clearing membership across major exchanges— CME, LME and SGX—Marex gives market participants direct access to global markets. Participants benet from research, liquidity access and credit facilities, so they can trade futures, options and OTC products. We also provide market intelligence on global trade flows so they can make informed decisions in the ferrous markets.
Q: How do people begin accessing these markets, and what key factors should one consider when developing a hedging strategy?
A: Developing an effective metals hedging strategy begins by fully assessing price risks in business operations and supply chains. It should consider purchasing patterns, sales contracts and inventory management to identify specic price exposures. Analyzing historical data helps determine which contracts and markets best correlate with business risks. The ferrous marketplace includes contracts that reference various points in the supply chain. These instruments can serve as effective hedging tools, even when physical contracts aren’t directly tied to specific indices, due to price correlations between related markets.
For example, we’ve seen consumers and producers of busheling using the forward futures curve to manage price risk. Similarly, service centers and OEMs in the HRC market engage in similar hedging activities. Understanding these correlations helps organizations develop strategies to mitigate price uctuations and protect margins.
JOSHUA TONEY has nine years of experience in the ferrous market. He began in the physical markets with David J. Joseph Co., a subsidiary of Nucor Corp., where he traded scrap and ferrous metallics. He later developed expertise in steel derivatives at Freight Investor Services. After a brief foray into the battery manufacturing sector, he returned to the ferrous markets at Marex marex.com, where he is head of ferrous metals trading, North America.
