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Singapore’s APEX to launch other oil contracts after 380 CST HSFO futures contract: spokesman

Singapore’s Asia Pacific Exchange, or APEX, is planning other oil and fuel contracts after launching its 380 CST high sulfur fuel oil with maximum 3.5% sulfur futures contract in April, a company spokesman said this week.

“The launch of the 380 CST fuel oil is just the start. APEX definitely has plans to launch other oil and fuel oil contracts,” he told S&P Global Platts in a statement.

This comes at a time when the International Maritime Organization’s global sulfur limit rule for marine fuels is inching closer. A majority of shipowners are expected to opt for very low sulfur fuels and marine gasoil, while a rise in new blended fuels is also expected in the market, some industry sources told Platts.

Meanwhile, the APEX spokesman said that in addition to energy products, APEX will also be listing other agricultural and financial derivative products.

“We feel that Asia has huge growth potential, especially with the huge market in China. We aim to provide Asian pricing benchmarks for commodities and to develop a new Asian financial derivatives risk management platform,” he added.

HSFO CONTRACTS

Its HSFO contract size is 10 mt, and the order size can be one contract to 500 contracts per order.

“One of the main characteristics of our contract is that we provide physical delivery as the settlement method,” the spokesman said.

Another feature is the design of small contract size, suitable for small and medium enterprises to participate, he said. Also, it can be used by larger players for more accurate hedging, he added.

On trade date April 30, the total trading volume of its HSFO contract was 20,553 lots; open interest stood at 2,126, while the turnover from these contracts was about $85.78 million, the spokesman said.

The contract size has been kept small to cater to small to large participants in both Singapore and internationally, he said. The contract size is the same as the fuel oil contract from the Shanghai Futures Exchange, allowing some Chinese participants to take part easily, he added.

“We see ourselves complementing the SHFE and ICE [Intercontinental Exchange] markets,” he said.

“For instance, investors may find cross-market arbitrage opportunities between our platform and SHFE and/or ICE. In this sense, we are not competing for the liquidity, but creating new opportunities for investors,” he added.

APEX is an international derivatives exchange approved by the Monetary Authority of Singapore, according to its website.
Source: Platts

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