The whole commodities world may be going ga-ga over futures trading; but the world's biggest steel company ArcelorMittal says it is not in favour of futures trading in steel.
Saying that futures trading in steel could completely distort the prices of the commodity, ArcelorMittal said on Tuesday that the company would not back the launch of steel futures on the London Metal Exchange.
"Yes, ArcelorMittal is not interested in the idea of steel futures," Onillon, Vice President of investor relations at ArcelorMittal, told a steel industry conference organised by Platts.
He said evidence of how markets could be distorted could be found in the nickel market, which has seen huge volatility, partly due to trading on futures markets.
Lakshmi Mittal, President and Chief Executive of ArcelorMittal, has also emphatically dismissed the idea of a futures market for the $500 billion steel industry.
The company has said that ArcelorMittal pricing is not settled by financial speculations but by steel market fundamentals and the supply/demand equilibrium.