|
||||||||||||||||||||||||||||||||||||
|
Last week Bloomberg reported that according to the World Federation of Exchanges (WFE) commodities trading jumped 23% last year. The WFE Report can be found here, while the Bloomberg story can be found here. According to the WFE the majority of volumes came from the United States and China with “the transfer of cleared OTC energy swaps to futures in the United States by the InterContinental Exchange in 2012 in anticipation of the final Dodd-Frank regulatory requirements, and a 40% increase in volume at Mainland Chinese Exchanges”. Commodity derivative volumes also climbed signifigantly in 2013, with OTC and exchange traded volumes climbing by 70% to over 1 million lots. The largest growth in terms of the number of lots was OTC Iron Ore which grew by 364,838 lots to 584,157 lots. Meanwhile the highest percentage growth was generated by OTC Rubber which grew 278% to 2,778 lots. Rubber Futures grew by 35% in 2013, and have continued to see participation pick up pace in 2014, with the contract establishing a recent record in daily volume at 4,275 lots on 11 March. In total six commodity derivatives experienced a growth in volumes: OTC Iron Ore, Rubber futures, Iron Ore Futures, OTC Oil, OTC Coal and OTC Rubber, while just the one commodity derivative saw volumes declines: OTC FFA. The growth in volumes is tabled and illustrated in the chart below.
Source: SGX Iron Ore Iron ore is widely used in the world and it is one of the major bulk commodities transported by dry-bulk vessels from Australia, Brazil and India to China and Europe. In response to increasing industry participants interest and demand to trade and clear iron ore swap for price and credit risk mitigation, SGX AsiaClear developed in co-operation with the industry and launched the world's first OTC iron ore swap Clearing on 27 April 2009. SGX is the clearing venue of choice for iron ore swaps, clearing over 90% of the global TSI iron ore swaps volume. Contract specifications for both OTC Iron Ore and Iron Ore futures can be found here. Rubber With over 80 years of trading heritage, the SICOM market is recognised as the world's price discovery centre for natural rubber and synonymous with providing the pricing standard for the rubber industry globally. SGX offers two SICOM Rubber Futures - RSS3 and TSR20 to provide market participants with a reliable pricing basis as a point of reference for their physical cargo and to manage price risks. SGX remains committed to serve as a pricing benchmark for regional and global producers, traders and consumers. Contract specifications for the two Rubber contracts can be found here while the specification for OTC TSR20 Rubber can be found here. Coal Like oil and natural gas, thermal coal is one of the fuel sources used for electricity generation. It is one of the major bulk commodities transported by dry-bulk vessels from coal exporting countries such as Australia to Asia. SGX offers Coal derivatives products for trading and clearing. The Exchange has listed both futures and swaps on the following two indices - (a) API 8 CFR South China Coal and (b) IHS McCloskey Indonesian Sub-Bituminous FOB marker. These derivative products are aimed to meet the coal industry's demand for an effective tool for hedging and counterparty credit risk mitigation. Contract specifications for both the API 8 CFR South China Coal Swap and the SGX API 8 CFR China Coal Index Futures can be found here. Please note that commodity derivatives have been categorised as Specified Investment Products (SIPs) as part of an MAS initiative to introduce stronger measures and enhance requirements to further safeguard the interests of individual investors. SGX has introduced two online initiatives, a Customer Account Review Module and an Online Education programme, to improve the understanding and trading of SIPs listed on SGX. Please click here to access these initiatives. |
FTSE Mondo Visione Exchanges Index:
SGX: Commodity Derivative Volumes Up 70% In 2013
Date 20/03/2014
