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Singapore’s APEX records first fuel oil futures for physical exchange

Friday, 09 August 2019 | 16:00

Singapore-based Asia Pacific Exchange (APEX) this week registered the first exchange of futures for physicals (EFP) for its 380-centistoke high-sulphur fuel oil (380-cst HSFO) futures contract, the company said in a statement.

A total of 3,000 metric tonnes of 380-cst HSFO were transacted on Aug. 6 through the EFP facility, APEX said in a statement on Thursday.

EFP deals allow holders of contracts for the same month to exchange their futures positions for a physical delivery.

Since its listing in April, the average daily volume for the 380-cst futures contracts have been around 26,000 lots, representing 260,000 tonnes of the fuel, with an open interest of around 5,500 lots, or 55,000 tonnes, the statement said.

APEX also plans to launch a low-sulphur fuel oil contract (LSFO) to meet the expected surge in demand for cleaner fuel as new global rules on marine fuels come into effect in 2020.

“We are in the midst of research and developing our LSFO contract and (expect) to launch it soon,” an APEX spokesman said.

New International Maritime Organization (IMO) rules prohibiting ships from using fuels containing more than 0.5% sulphur, compared with 3.5% currently, will start on Jan. 1, 2020, to combat air pollution.

APEX launched the 380-cst HSFO futures contracts – its first for residual fuel oil – in April. The contracts are U.S. dollar-denominated and represent 10 tonnes of fuel oil each that is physically deliverable against quality-assured physical fuel oil if held until expiry.
Source: Reuters (Reporting by Roslan Khasawneh; Editing by Tom Hogue)

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