The contracts will be the first chemical futures to be traded as well as the first time chemical futures products will trade on a futures exchange with an electronic link to an online business-to-business (B2B) marketplace. The new futures contracts will provide previously unavailable risk management opportunities for the chemicals industry.
Each benzene or mixed xylenes contract will represent 42,000 gallons of the chemical and will be cash settled at contract expiration to an index of monthly chemical industry contract prices compiled and calculated by DeWitt & Company, a Houston-based international chemical consulting firm. Contracts will be quoted in U.S. dollars per gallon, with a minimum price increment (tick) of $0.001 per gallon valued at $42.00 per contract.
Electronically traded on CME's GLOBEX®2 electronic trading system, contracts will be offered in all 12 calendar months, with six consecutive months listed for trading at all times. At launch, the lead month contract will be December 2001. Opening day trading will be gain at 10 a.m., and thereafter regular trading hours will be from 8:30 a.m. to 2:15 p.m. (Central Time), Monday-Friday.
Linked via the Internet, CheMatch.com's secure, neutral trading platform and the GLOBEX2 system will provide seamless transitions between the two sites and offer chemical companies, traders and financial institutions the ability to trade both physical and derivative products. Members of the CheMatch.com Global Trading Networksm will be able to enter trades on GLOBEX2 through the CheMatch.com platform at www.chematch.com. The new products will trade exclusively electronically on GLOBEX2 and clear with CME clearing firms through CME's state-of-the-art CLEARING 21® clearing system.
Benzene is used in the production of such products as plastics, fabrics, pharmaceuticals, adhesives, detergents, dyes, paints and disinfectants. Trace amounts of benzene occur naturally in crude oil, and benzene can be synthesized from other petroleum-based chemicals as well as from coal or natural gas. Most benzene is produced in conjunction with the gasoline refining process.
Mixed xylenes are used in the production of polyester plastics and fibers for such products as fabrics, carpets, soft drink bottles and packaging. They are also used in other plastics, solvents, adhesives, epoxy resins, dye, paint and as a gasoline additive. Mixed xylenes, composed of paraxylene, metaxylene and orthoxylene, plus ethylbenzene, are produced as a byproduct of the oil refining process and from the conversion of other petrochemicals.
Chicago Mercantile Exchange Inc. (www.cme.com) is an international marketplace that brings together buyers and sellers on its trading floors and GLOBEX2 around-the-clock electronic trading system. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indexes, foreign currencies and agricultural commodities. The exchange moves about $1.5 billion per day in settlement payments and manages $28.4 billion in collateral deposits.
CheMatch.comSM - The Global Trading NetworkTM is a business-to-business, Internet-based market place for purchasers and sellers of bulk commodity chemicals, plastics, feedstocks and fuel products. The marketplace incorporates a real-time, interactive trading exchange where members can trade 24 hours a day, seven days a week. Since inception of the CheMatch.com Global Trading Network, over 4.6 million metric tons of product have been transacted, representing a cumulative notional value of over 1.7 billion dollars. Strategic and financial investors include Battery Ventures, Bayer AG (NYSE: BAYZY), (FSE: BAYG.F), E.I. DuPont de Nemours and Company (NYSE:DD), GE (NYSE:GE), Methanex (Nasdaq:MEOH;TSE:MX), Millennium Chemicals (NYSE:MCH), H. Muehlstein & Co., Inc., Reed Elsevier, Sprout Group, Stolt-Nielsen S.A. (Nasdaq:STLTF), (Nasdaq:STLBY), (Oslo Stock Exchange:SNIB) and YourEnergySource.com. Headquartered in Houston, CheMatch.com has international offices in Bangkok, Germany, Korea, Rotterdam and Singapore.
