Singapore - The Singapore Exchange announced on Friday that it will launch the world's first clearing of over-the-counter (OTC) iron ore swap contracts on April 27.

The SGX said it has also signed an agreement with the Steel Index (STI) to provide its reference price for the settlement of the iron ore swap contracts to be cleared via SGX AsiaClear.

A 500-metric-ton iron ore swap contract would be cash-settled based on the average of TSI iron ore reference prices in the expiring month.

The contract would further enhance the iron ore derivatives trading and risk management activities in Asia, said TSI managing director Steven Rendall.

"The launch of the SGX iron ore swap clearing will increase market participation and facilitate the growth of an active iron ore swap market," added Raymond Key, global head of metals trading of Deutsche Bank.(dpa)