The Shanghai International Energy Exchange (INE) on Thursday (26 November) signed an agreement with Petro China International Co Ltd for the overseas delivery for its low Sulphur fuel oil (LSFO) futures contract, reportes Reuters.
About the Partnership
“The partnership is a consensus on a first overseas delivery for the bunker fuel as an important foundation towards China’s futures delivery going global”, said the INE.
This would be the first time a Chinese futures contract would be deliverable outside of China. The Shanghai INE gained approval from the China Securities Regulatory Commission to list its LSFO futures contracts in June this year.
While the INE statement did not name the specific storage sites or delivery points, it cited that Petro china had distribution centers for bunker fuel oil Zhoushan, as well as overseas in Singapore and the UAE.
Benefits of Partnership
The partnership marks the first time a futures contract in China can be deliverable outside of China, and would boost liquidity and flexibility for the contracts, as well as help to influence pricing for bunker fuel.
It could boost the liquidity and increase the pricing influence of the low-Sulphur fuel oil contract.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Reuters
