Steel futures may reappear on China's futures market for the first time in 11 years, a source with the Shanghai Futures Exchange (SHFE) said Friday.

This follows China's largest steel maker Baosteel's agreement in February with two of the world's leading iron ore providers, Hamersley of Australia and Companhia Vale do Rio Doce (CVRD) of Brazil, on their 71.5-percent rise in ore prices.

"The SHFE is researching steel futures and has submitted applications to the China Securities Regulatory Commission," said Xiao Hui, an SHFE researcher.

The capacity of China's crude steel production has been estimated at 333 million tons in 2005, while its steel demand can hit 270 million tons, Xiao said. In 2004, the country produced nearly 30 percent of the world's steel.

"To open steel futures can help protect China's pricing rights on international steel markets, given that China has become a big steel producer and consumer in the world," Xiao said.

In early 1994, futures exchanges in Shanghai, Tianjin, Chongqing and Beijing were approved to start wire rod futures, which were soon banned by regulators because of over-speculation.