# Iron ore depreciation boosts options market

## Options now account for 60% of total open interest on SGX's iron ore derivatives

Traders have been increasingly switching to options to hedge out the downside from the 50% decline in iron ore prices over the past year from $130 to below$65, as part of a broader surge in derivatives activity linked to the base metal from small producers facing serious cost pressures.

Iron ore prices averaged \$62.62 per tonne in February, down 6.8% since January and more than 50% down over a 12-month period. Lower steel output in China corresponding to lower iron ore demand as well as excess

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The week on Risk.net, March 10-16 2018