Freight Investor Services To Begin Coverage Of Four Pulp And Paper Futures Contracts - China-Focussed Contracts Enable Traders And Hedgers To Access Fresh Liquidity With Exchange And Index Settlement

Freight Investor Services, the leading broker of freight and commodities futures and options, is supporting traders wishing to take advantage of the cash-settled pulp and paper contracts offered by NOREXECO clearing against the Shanghai Futures Exchange final delivery settlement price and Fastmarkets FOEX.

The first of four new contracts – Shanghai Bleached Softwood Kraft Pulp Futures (NOREXECO Shanghai Pulp Futures) is already available via NOREXECO with financial settlement against the NOREXECO Shanghai Final Index (NSFI).

In Q1 2021 NOREXECO will launch two additional China-focussed contracts, Northern Bleached Softwood Kraft (NBSK CIF China Future) and PIX Bleached Hardwood Kraft Pulp (BHKP China Net Future) both with settlement against the Fastmarkets FOEX.

NOREXECO will also launch a new contract for recycled paper (NOREXECO Recycled Paper OCC) also with settlement against Fastmarkets indices.

These new contracts enable traders in the physical market and those interested in trading volatility to take advantage of market movements and hedge their exposure. FIS is delighted to have this opportunity to link volumes between Asian and Western counterparts and provide a fresh trading opportunity.

China accounts for 36% of pulp demand, importing 9m tonnes of softwood NBSK and 12m tonnes of hardwood BHKP annually. Around 400m tonnes of Pulp futures traded on the SHFE last year and annual volatility of the NBSK contract is around 27%, higher than Cotton, Copper and Brent Crude.

FIS has a track record of more than a decade in developing liquidity in new markets and is ideally positioned to help new and existing clients add this asset class to their trading portfolios.

“With annual volumes of 70m tonnes and 200m tonnes respectively, the pulp and recycled paper markets represent a huge opportunity for traders with physical exposure to the Chinese market and futures players seeking new counterparts,” said John Banaszkiewicz, Managing Director, Freight Investor Services. “FIS is delighted to bring a new opportunity to credible and long established markets and create fresh liquidity to participants eager to access index-settled futures contracts.”

Specifications for the NOREXECO contracts are available on request, FIS clients should contact their broker to find out more.