ZCE to Launch the Trading of PX Futures on Sep 15, 2023
The PX market has recently performed reasonably well, surpassing the $1,110/mt threshold and climbing back to a 5-month peak.
First, favorable economic statistics and anticipated supply shortage have boosted the Brent oil price to exceed $90/bbl. Second, while the operating rate in the Asian PX market is low, a Chinese manufacturer intends to scale back output. Thirdly, the demand for PX in the PTA sector is strong. Fourth, PX futures will soon be listed, which underpins the mentality of market players.
Zhengzhou Commodity Exchange (ZCE) is set to launch the trading of paraxylene (PX) futures on September 15 (Friday).
The trading hours of the day session will be 09:00-11:30 and 13:30-15:00 (Beijing time). The evening session will be 21:00-23:00, starting from September 15, according to the notice.
The first batch of PX futures contracts listed for trading are PX2405, PX2406, PX2407, PX2408 and PX2409.
The standard trading margin (a performance deposit) is 12% of the contract value, and the stop range is plus/minus 10%.
The introduction of PX futures can enhance the industry’s price transparency. From the standpoint of the industrial chain, PX futures can work with PTA futures to better achieve risk hedging and arbitrage, and benefit the smooth operation of its downstream polyester products and textile industry.
PX pricing rules
At present, there are two mainstream currency models for PX prices: the USD price and the RMB price.
ACP (Asian Contract Price), which is issued on the final working day of each month, is one of two types of USD prices. The ACP is carried out by ACP members the following month. The difficulty of ACP negotiation is rising as a result of the growth of the integrated model. It was only accomplished once in April 2023 and not once throughout the entirety of 2022, which steadily diminished market interest. Zhejiang Yisheng Petrochemical will no longer use the ACP settlement mechanism after 2023. The daily market price is the other type. Since PX is primarily an import shipping company, it takes over a month to negotiate deals, prepare products, declare ports, and issue letters of credit. The daily market price therefore primarily assesses commodities that arrive within 6-12 weeks.
The listing price, which is disclosed on the last working day of every month, acts as the benchmark for the enterprise advance payment for the next month. The settlement price, which is primarily used for contract settlement between PX producers and downstream users, is often made public on the 22nd to 24th of each month. Chinese manufacturers do post monthly prices, although they often use the monthly average of the daily USD market prices. The figure below illustrates how closely the price trends of the USD and RMB prices are parallel. As a result, the market pays more attention to the daily USD market price.
The pricing of PX futures at the start of listing will draw the attention of the market because there isn’t a PX RMB daily price in China. Market insiders claim that the opening price of PX futures may be based on the RMB price converted from the average USD price during the month before the launch.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
