SGX launches methanol futures and swap contracts

S&P Global Platts daily price checks will be used as their benchmark.

The Singapore Exchange (SGX) has launched methanol futures and swap contracts that are cash-settled and with the S&P Global Platts daily price assessments as a benchmark, an announcement revealed.

The bourse said this will help methanol producers, traders and downstream users manage risk and improve price discovery amidst rising demand.

The SGX Platts Methanol CFR China Swap and the SGX Platts Methanol CFR China Futures will both be listed with 12 consecutive contract months, starting from 24 February 2020.

China’s apparent demand for methanol grew by nearly 17% YoY to 69.3 million metric tonnes (MT) in 2019, on the back of sharp growth in the petrochemical and downstream manufacturing sectors. Platts’ CFR China index has similarly grown in stature with nearly 10 million MT of imports in 2019.

“The launch complements and broadens our other petrochemical products, which now serve as key offshore tools for forward price discovery. Across our petrochemical suite, we have seen a 100% compound annual growth rate every year for the past four years and we are expecting this trend to continue this year,” said William Prajogo, petrochemical product manager at SGX.