NYMEX to list 11 marine fuel 0.5% futures contracts ahead of IMO sulphur cap

New York Mercantile Exchange (NYMEX) will launch trading for 11 marine fuel 0.5% futures contracts on the CME Globex electronic platform from 9 December this year, roughly one year ahead of IMO’s 2020 fuel sulphur cap regulation.

The futures contracts will be cleared via CME ClearPort and will settle against S&P Global Platts physical marine fuel 0.5% assessments, announced CME Group, owner and operator of NYMEX.

The futures contracts to be launched are: USGC Marine Fuel 0.5%; European FOB Rotterdam Marine Fuel 0.5% barges; Singapore FOB Marine Fuel 0.5%; Mini European FOB Rotterdam Marine Fuel 0.5% barges; Micro European FOB Rotterdam Marine Fuel 0.5% barges; Mini Singapore FOB Marine Fuel 0.5%; Micro Singapore FOB Marine Fuel 0.5%; Singapore FOB Marine Fuel 0.5% vs European FOB Rotterdam Marine Fuel 0.5% Barges; USGC Marine Fuel 0.5% vs Gulf Coast HSFO; Singapore FOB Marine Fuel 0.5% vs Singapore 380 CST Fuel Oil; and European FOB Rotterdam Marine Fuel 0.5% vs European 3.5% FOB Barges.

Back in September 2017, Platts had proposed to publish daily cargo and barge assessments for marine fuels with a maximum sulphur content limit of 0.5% across key global ports from 2 January 2019. The new assessments are to be named ‘Marine Fuel 0.5%’.

Read more: Platts proposes new 0.5% sulphur fuel assessments from 2019

The new futures contracts mean bunker traders will be able to hedge a 0.5% instrument against a potential price fluctuation ahead of the IMO 0.5% global marine fuel sulphur content cap in 2020.

Platts reported that liquidity on the 0.5% swap contracts is as yet unknown, but traders believed in increased activity through 2019 as demand for 0.5% low sulphur fuel picks up towards the fourth quarter of 2019.

Posted 22 November 2018

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Lee Hong Liang

Asia Correspondent

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