China's DCE targets SM futures launch

: Petrochemicals
19/09/02

China's Dalian commodity exchange (DCE) is aiming to launch styrene monomer (SM) futures on 26 September.

The exchange is still collecting opinions and feedback from market participants on its proposed SM futures contract. SM will be the fifth petrochemical futures contract from the DCE after linear low-density polyethylene, polyvinyl chloride, polypropylene and ethylene glycol.

The DCE SM futures contract proposes a 5t per contract lot with a minimum tick of 1 yuan/t. The daily upper and lower limit price fluctuation is set at 4pc of the last settled price with a minimum trading margin of 5pc of the contract value.

Futures contracts will be listed for 12 consecutive trading months and contracts will expire on the fourth last working day of each calendar month. The last day for physical settlement of each contract is set on the third last working day of each calendar month.

As east China is the main area where domestic Chinese SM is being produced, as well as imported, the DCE is looking to have delivery points at Jiangsu, Zhejiang and Shanghai. The DCE had issued invitations to tank storage owners and operators on 26 August for them to submit their interest in being a delivery point for contract settlements in the three designated areas.

The DCE may also look at designating contract delivery points in south China.

SM is used for the production of acrylonitrile butadiene styrene, which is used to make toys and luggage, as well as expandable polystyrene that is used as housing insulation.

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