SGX To Launch Petrochemical Derivatives

The Singapore Exchange will introduce the SGX Platts PX CFR China Swaps and Futures on Dec 2 and a series of Polyolefin contracts on Jan 19 in 2015.

The Singapore Exchange (SGX) will be launching petrochemical derivatives in two phases over the next two months, to address the rising demand for more effective risk management solutions for the petrochemical industry.

In a statement on Friday (Nov 21), SGX said it will introduce the SGX Platts PX CFR China Swaps and Futures on Dec 2, and a series of Polyolefin contracts on Jan 19 in 2015.

According to SGX, the "rising demand from major end-use industries, such as construction, packaging, textile and healthcare, as well as favourable operating conditions mainly in the Middle East and Asia Pacific, continue to drive growth in the global market for petrochemicals".

It added that given the volatile nature of the market, the new swaps and futures contracts aim to provide a more effective hedging instrument for petrochemical industry participants in the Asia PX, PP and PE physical markets.

SGX said the Asia PX, PP and PE physical markets are estimated to have grown to 45 million tonnes, 23 million tonnes and 35 million tonnes respectively - with China contributing the largest share.