The London Metal Exchange (LME) has completed the merger of its Mediterranean and Far East steel billet contracts into a single, global contract.

According to LME, the new contract recognizes steel as a global industrial commodity. Since the decision to merge the two contracts was announced in December 2009, trading in the LME’s Mediterranean contract has surged, up 385% year-on-year in the first six months of 2010.

To further support this market the LME is also expanding its network of storage facilities and delivery locations. In June, the board of directors of LME resolved that the Exchange would list New Orleans as a good delivery point for the global steel billet contract with effect from July 29, and the LME is considering several other locations in Europe and the US.

Chris Evans, head of business development at the LME, said: “The decision to merge the two steel contracts into one has been met with a very strong response by the industry worldwide. The addition of New Orleans as a US delivery location will undoubtedly add further momentum, while post-recession growth will encourage new demand for transparent price referencing and risk management.”