Enhanced margin and price risk management opportunities for a broadened spectrum of both producers and consumers of olefins and commodity polymers.
Houston, TX (April 21, 2010) — Effective April 26, 2010, Houston Mercantile Exchange LLC (HMX) will list for trading, the new financially cleared ethylene swaps which will clear through the CME Group ClearPort® clearing system. The settlement basis for the new ethylene swap will be the monthly average spot ethylene price published by Petrochem Wire. “To the extent companies have some portion of their polyethylene prices indexed to ethylene (more specifically the PCW index), the new ethylene swap might be an instrument participants could utilize to help manage price risk in the volatile commodity polymers market” said HMX President & CEO, Eric Paulsen. “Additionally, the ethylene swap completes the margin management link from feedstocks through ethylene for many olefin and polymer producers”.
“So many companies already manage their fuel and energy risk, and now they are looking at other areas for these efficiencies, such as packaging. Packaging in particular leads them up the resins chain to ethylene and ethane, which for many of them completes the circle back to energy,” said Kathy Hall, editor of the PetroChem Wire newsletter. “Historically, what’s kept many companies from engaging ethylene as part of their risk management strategy has been the need to secure physical delivery options, counterparty risk and index risk. The launch of the CME ethylene swap contract erases two of those barriers, and we’re grateful that the PetroChem Wire has been selected as the benchmark index for the contract.”
Counterparties are available on the HMX electronic platform where bids and offers are transparent for all market participants. HMX also has liquidity and transparency in the natural gas liquids market: especially the forward prices and transactions for the basic ethylene feed stock – ethane. To obtain access to the HMX marketplace, please contact either of the below. More information about the olefin and polymer markets available on HMX is available by clicking here and more information about the company is available on our website at www.houstonmerc.com.
Please contact either Eric Paulsen at 713-405-1161 or Cynthia Wigren at 713-405-1158 (xpress@houstonmerc.com).