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The two contracts will each have a lot size of 20 tonnes, and will use The Steel Index hot-rolled coil Asean imports reference prices for settlement, Tan Say Liang, SGX’s vp for commodities told delegates at a steel forum in Jakarta, Indonesia on Monday November 25.

The launch is subject to regulatory approval.

Tan said the Assn of South East Asia Nations (Asean) region is likely to become the fifth-largest automotive market by 2019, growing at 5.8% from 2012 to 2019 to 4.7 million units.

Thailand is becoming a vehicle production hub, while Indonesia is expected to be the largest automotive market in the Asean, he said.

The three major importers for flat products in the region are Vietnam, Thailand and Indonesia, with Japan, South Korea, China and Taiwan being the main sources of supply.

According to Chow Chong Long, president of Asean Iron and Steel Council, demand for flat steel increased by an average growth rate of 7.3% between 2000 and 2012.

Flat steel output within Asean will pick up in the next few years as several big projects come on stream, he said.