As an independent price reporting agency, S&P Global Platts welcomes the role it plays in providing data and information services to the market, increasing transparency across the existing suite of petrochemical futures offerings.
In comparison to the European and Americas markets, there is greater liquidity in Asian spot petrochemicals markets which is further supported by vibrant paper markets that provide hedging environments for traders and producers both upstream and downstream.
Within Asia, Benzene FOB Korea, Paraxylene CFR Taiwan/China, and Methanol CFR China are futures contracts listed on the Singapore Exchange, while FOB Singapore MTBE is listed on the Chicago Mercantile Exchange.
All of the futures mentioned above are settled based on the respective S&P Global Platts assessments.
Paraxylene futures traded on SGX off the CFR Taiwan/China Platts assessment are among the most important contracts in the Asian petrochemicals market, providing market players with a hedging mechanism and a means to take market positions.
SGX paraxylene volumes hit an all-time high of 3.99 million mt cleared in 2018, up 70% on the year, before posting a slight fall of 10% to 3.58 million mt in 2019.
Final settlement price
Launch
SGX Platts Benzene FOB Korea Futures
0.01
DMOPK in expiring month, 3 decimal places
05-May-08
SGX Platts Paraxylene CFR Taiwan/China Futures
DMOPT in expiring month, 2 decimal places
02-Dec-14
SGX Platts Methanol CFR China Futures
Average of CFR China daily in expiring month, 2 decimal places
24-Feb-20
MTBE FOB Singapore (Platts)
Average of FOB Singapore in contract month
22-Oct-18
Source: Singapore Exchange, Chicago Mercantile Exchange
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Slower trading activity in 2019, particularly in the second half, was due to additional supply from new capacity that kept prices under pressure late in the year.
Moving into 2020, PX volumes spiked 180% on the month in January, or 4% over the same period last year, amid raised volatility driven by the coronavirus outbreak.
In 2019, benzene, the more volatile of the two aromatics contracts last year, led the pack in terms of growth rate, contributing over 1.4 million mt, up 33% year on year.
Despite a smaller variance across the assessed daily FOB Korea benchmark each month, cleared volumes on SGX have increased significantly, with benzene a key feedstock for over 250 downstream products, including styrene, phenol, caprolactam, and methylene diphenyl isocyanate (MDI).
Participants in downstream markets are able to, through the proxy of benzene, take part in the paper market as a form of risk management.
Since 2018, benzene-naphtha and paraxylene-naphtha values have diverged, with paraxylene prices surging due to demand from the polyester industry, resulting in an increase in operating rates across aromatics units.
Surging paraxylene production created a global excess of benzene, which is a by-product in paraxylene production, and the FOB Korea benzene benchmark faced downward pressure.
MTBE futures totaled 91,300 mt in 2019 – its first year of trading.
Traded monthly volumes reached their highest level in May at 24,000 mt as 95 RON gasoline prices hit a then year-to-date high of $83.54/b on April 22, Platts data showed.
The methanol future is a contract started in late February to help methanol producers, traders and downstream users manage risk and improve price discovery amid rising demand.
Petrochemical prices occasionally move according to a different set of fundamentals from oil markets, and additional complexity is introduced due to volatility in upstream naphtha and oil, which also creates difficulty for producers, resulting in a greater need to manage risk across the value chain.
—Tess Tseng, Samar Niazi