The financial markets in iron ore and steel have huge growth potential, with development in the materials' financial products sectors out-pacing early growth in the now-large oil derivatives market, the head of metals brokerage at BNP Paribas Commodities Futures said Tuesday.

Taking into account BNP Paribas' forecast for 1 billion metric tons of global sea-borne iron ore trade this year, if financial markets in iron ore were as active as oil, the market could see 7 billion tons of volume in the future, Michael Zeitler told Metal Bulletin's Steel Success Strategies conference in London.

"You can see how much room there is left to grow," he said.

Activity is iron ore swaps is growing, with open interest on the Singapore Exchange (SGX) having hit a new record high of 9,799 lots, or 4.9 million tons in September, according to The Steel Index, one of several information providers that generates indexing for iron ore prices.

In the past three to four years, the iron ore and steel financial markets have developed as much as the oil market did in fifteen years, Zeitler added.

"Over the last few years, we've had [iron ore and steel] contracts emerge on various venues," he said. "The world of steel will change. It's not a case of if, but how and when. 'When' is today."

The London Metal Exchange launched a steel billet futures contract three years ago.

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