June 22, 2020 / 10:19 AM / 20 days ago

FACTBOX-Details on China's low-sulphur fuel oil contract

 (Adds night trading hours in table)
    SHANGHAI/SINGAPORE, June 22 (Reuters) - China's Shanghai
International Energy Exchange launched its low-sulphur fuel oil
futures contract on Monday June 22. 
    The yuan-denominated contract is China's latest derivative
commodity product open to foreign investor participation and is 
aimed at becoming Asia's price benchmark for the cleaner
shipping fuel now required. 
    The contract could further China's ambition to build a
regional bunkering hub in Zhoushan port to vie for the
multibillion-dollar ship fuel market dominated by Singapore. 
    China's bonded marine fuel market of about 12 million tonnes
a year is dwarfed by the 47.5 million tonnes of bunkers that
leading bunkering centre Singapore sold in 2019. 
    Below are the contract's specification and details:
    
 Product name              Low-sulphur fuel oil, max sulphur
                           content of 0.5% 
 Contract size             10 metric tonnes per lot
 Price quotation           yuan per tonne
 Daily price limits        ±5% from the settlement price of
                           the previous trading day
 Minimum trading margin    8% of contract value
 Trading hours             9:00-11:30 a.m., 1:30-3:00 p.m.
                           and 9:00-11:00 p.m. Monday-Friday
                           (Beijing Time) 
 Last trading day          The last trading day of the month
                           prior to the delivery month
                           (postponed accordingly if it is a
                           national holiday or weekend)
 Settlement type           Physical delivery
 Delivery months           January, February, March, April,
                           May, June, July, August,
                           September, October, November, and
                           December
 Delivery period           Five consecutive trading days
                           after the last trading day
 Designated delivery       - Sinochem-Xingzhong Oil Staging
 storage facilities        (Zhoushan) Co., Ltd. 
                           - Zhejiang Offshore Petroleum
                           Reserve Co., Ltd.
                           - Dading Petroleum Logistics Co.,
                           Ltd.
                           - Yangshan Shengang International
                           Oil Logistics Co., Ltd.
 Storage capacity          570,000 tonnes approved capacity, 
                           320,000 tonnes active
 Storage fee               3 yuan per tonne each day
 Delivery fee              1 yuan per tonne (exempted until
                           Jan 8, 2021)
 
 (Reporting by Emily Chow in Shanghai and Chen Aizhu in
Singapore; additional reporting by Tom Daly in Beijing; Editing
by Tom Hogue and David Goodman)
  
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