The first futures product of this year has landed in a large commercial firm——
"Small crude oil" futures options come to our reporter Zhu Huichun

On March 30, LPG futures and options were listed on the Dalian Commodity Exchange. This is China's first gas energy product, and it is also the first futures and options product launched simultaneously in China. Energy varieties.

Li Zhengqiang, the chairman of the Dashang Institute, said that the successful listing of liquefied petroleum gas futures and options is an important measure for China's capital market to "resist against epidemics, maintain stability and promote development", firmly support the real economy and boost market confidence. The China Securities Regulatory Commission approved the simultaneous listing of liquefied petroleum gas futures and options, which is of great significance, marking that Dashang has achieved "variety expansion and rich tools".

Liquefied petroleum gas is a light hydrocarbon produced during petroleum refining. It is gaseous at normal temperature and pressure. It can only become liquid under high pressure and low temperature conditions. Since LPG comes from oil field associated or refineries, changes in crude oil supply and demand, prices, etc. have a great impact on its price, so LPG is also called "small crude oil". At present, China has become the world's largest importer and consumer of LPG. Based on an apparent consumption of 47.06 million tons in 2019 and an average price of 4,000 yuan per ton, the market size is about 180 billion yuan.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said that liquefied petroleum gas is an important clean energy and chemical raw material, and listed liquefied petroleum gas futures and options are important measures for the futures market to implement the concept of green development and promote the improvement of the energy price formation mechanism. As a representative, the major progress in the construction of the domestic energy futures market system is also a new attempt for the listing mechanism of futures varieties. China is the world ’s largest importer and consumer of LPG. Carrying out futures and options trading will provide industrial companies with open, continuous and transparent price signals and effective risk management tools, which will help promote the stable operation of related companies. Promote the steady development of the LPG industry.

Since 2000, with the substantial increase in the participants in the LPG market and the rapid development of local refineries, the market share of imported resources has steadily increased to over 40%, and the overall LPG market has entered a completely competitive state.

However, there has been no uniform price for the LPG market in China. Recently, the new crown pneumonia epidemic has restrained demand, the decline in crude oil has affected future expectations, the international LPG price has fallen simultaneously, and a sharp decline has been launched in China. The LPG market has experienced turbulence and risk accumulation. Provide new means to hedge market risks.

Liu Heming, chairman of the China Gas Association, said that the listing of LPG futures and options was timely, and provided many gas companies with effective risk management tools to deal with price fluctuations, optimize resource allocation, promote downstream gas industry integration, and improve city gas. The market price formation mechanism is of great significance to enhance the pricing power of China's liquefied petroleum gas sector and the bargaining power of the international market.

Relevant experts from Sinopec Refining Sales Co., Ltd. told reporters that although there are LPG derivatives in the international market, their influence is not great, and domestic companies only use related tools in international business, and domestic business is basically unused. The timely introduction of domestic LPG futures and options will be more adapted to the domestic market, reflecting the status of the domestic LPG market, and more conducive to risk management of import business.

Liang Bin, deputy general manager of Wanhua Chemical (Yantai) Petrochemical believes that liquefied petroleum gas is the most marketable and commercialized species in gas energy with many participants. The listing of related commodity futures and options will provide enterprises with diversified risk hedging tools. , You can hedge the risk of inventory depreciation.

"Last year, China imported about 20 million tons of liquefied petroleum gas. The futures market can help China to set its own market price, which is conducive to improving China's right to speak in relevant market areas." Liang Bin said.

Zhu Huichun