(EnergyAsia, April 11, Friday) — Singapore Exchange Limited (SGX) said it is launching the world’s first clearing service for over-the-counter benzene swaps to serve growing demand for credit risk mitigation in the petrochemical market.

SGX AsiaClear will launch the service on May 5. Including this new product, SGX will have 13 energy contracts.

The size of each benzene FOB Korea Swaps contract is 500 metric tons. It will be cash settled based on the monthly average of Platts’ daily spot marker physical cargo assessments in the contract month.

Benjamin Foo, SGX Head of Clearing, Commodities and AsiaClear said:

“SGX has been working closely with OTC and petrochemical market participants to introduce benzene swaps to meet their trading and risk management needs. This product complements SGX’s suite of OTC oil contracts.”

Simon Chua, vice president for Summit Petrochemical Trading Inc, said: “Asia is an important pricing centre for aromatics. The launch of the SGX benzene swaps clearing facility is timely as there is a need for such a service in the petrochemical market. This service will help to create a more active benzene paper market for traders and producers to manage their price and counterparty risks.”