Methanol and PTA Options were Listed on CZCE

Methanol and PTA Options were Listed on CZCE

China's first batch of energy and chemical options - PTA options and methanol options were listed on Zhengzhou Commodity Exchange (CZCE) on December 16, 2019.

The market players pointed out that as the "binary stars" of the energy and chemical market, PTA and methanol play an important role in China's national economy, and the futures of PTA and methanol are unique futures varieties in China. "The introduction of PTA options and methanol options can complement the advantages of related futures, help form a more reasonable futures price, better meet the personalized and diversified risk management needs of physical enterprises, and help promote the high-quality development of China's energy and chemical industry." CZCE Chairman Xiong Jun said in the listing ceremony.

Building a multi-level risk aversion system

"PTA and methanol have a good spot goods foundation and high maturity, and the futures markets operate smoothly and function effectively, so they have all the conditions for carrying out options trading.", the related responsible person of CZCE said. PTA and methanol futures were listed in CZCE in 2006 and 2011 respectively.

PTA is the main raw material of chemical fiber, which connects the petrochemical industry and textile industry, the two pillar industries of national economy. Methanol is not only a basic chemical raw material, but also a kind of new clean energy, involving energy, building materials, medicine and many other industries and fields. The capacity of PTA and methanol in China accounts for about 50% and 60% of the world, respectively, leading the world in terms of production and sales.  

Since last year, influenced by the changes in crude oil price, exchange rate and industrial chain structure, the price fluctuations of PTA and other products have increased, and the uncertainty and complexity in the production and operation of physical enterprises have further increased. The players pointed out that in this context, after the listing of PTA and methanol options, they can form synergy with related futures varieties to escort the healthy operation of the energy and chemical industry.

Active participation of enterprises

Currently, about 90% of PTA production and trading enterprises and 80% of large polyester enterprises use PTA futures to carry out hedging operations. Major methanol producers, downstream olefin enterprises and more than 90% of trading enterprises also actively participate in the futures market. Basis trading and pricing have become the main methods of spot market pricing and trade.

“The launch of PTA and methanol options will greatly enhance the confidence of relevant players. After the listing of PTA and methanol options, our risk management system will be further improved. The two trading tools of PTA and methanol, namely futures and options, will form a joint force to escort the healthy operation of the energy and chemical industry." according to Wang Xu, the director of the futures department of Tangshan Risun Petrochemical.