(EnergyAsia, November 21 2014, Friday) — Singapore Exchange (SGX) said it will begin offering petrochemical swaps and futures contracts from December 2 in response growing demand from industry players to hedge their trading positions.
The exchange said it will introduce a set of five petrochemical derivatives tools in two phases, starting with the SGX Platts Paraxylene (PX) CFR China swaps and futures contracts on December 2, to be followed by a series of ICIS-linked polyolefin contracts on January 19 2015.
SGX said these contracts will be the first in the petrochemicals market to be cleared on an exchange. Petrochemical pricing media ICIS will provide the index for the polyolefin contracts while the PX CFR China contract will be cash settled against the Platts index to complement the exchange’s existing benzene contract.
SGX said the contracts will serve the industry as global consumption will continue growing building on the past decade’s rapid growth in the use of petrochemicals and plastics in the construction, packaging, textile and healthcare sectors mainly in the Middle East and Asia Pacific region.
SGX said Asia now consumes around 45 million tonnes of paraxylene, 23 million tonnes of polypropylene and 23 million tonnes of polyethylene each year, with China taking the lion’s share.