The Dubai Gold and Commodities Exchange (DGCX) is delaying the launch of its steel futures contract until after summer to ensure a strong start.

The exchange had said it would launch the internationally tradeable steel futures contract on June 27. The DGCX has repeatedly delayed plans to launch the contract.

"The overwhelming requests to delay the launch to enable all players to actively take part have forced us to revise our start date," David Rutledge, a director at DGCX said in the statement.

"Although this may disappoint some in the industry... the beginning days for any contract are important so as to ensure the best start with the maximum number of participants and volume of trade."

The $500-billion steel market lacks a transparent global benchmark for setting prices or hedging risk.

So far, steel makers have been cool to the idea of futures contracts, with few of the major producers expressing an interest in using them.

The London Metal Exchange (LME), through which most of the world's base metals are traded, has said there was a very good chance it would be trading a steel futures contract in early 2008.

The New York Mercantile Exchange (Nymex) said in April it hoped to launch steel contracts within six months, while the Shanghai Futures Exchange is also looking at contracts for rebar and steel wire.

"The (Dubai) exchange so far has received good responses from banks and funds, but the key steel players in the market are still suspicious about it," a Dubai-based steel producer said.

"They still need some time in order to make sure that those players will trade the contract." The DGCX is banking on demand from the construction industry in the world's biggest oil exporting region where more that $1 trillion worth of infrastructure projects are in the pipeline.

Futures contracts would allow steelmakers and their customers to reduce risk by locking in prices.

Openly traded futures would also allow financial market speculators to bet on whether steel prices rise or fall, just as they do in base metals, energy, currencies and stock markets.

The Dubai steel contract will be for reinforcing bar (rebar), used in construction. It is the first of four contracts targeted to the steel supply chain that the DGCX plans to issue.

The rebar contract will be accessible to international investors, unlike steel contracts in India and China, which are only for domestic market participants.

The Gulf region's demand for rebar was expected to grow at around 9 percent a year from 2005 to 2010, three times the rate of global demand growth, the exchange has said.

Earlier, the bourse began trading the world's first contracts on the Indian rupee without the blessing of India's central bank, which may lose some control over the partially convertible currency.