APEX – FIRST EPF FOR FUEL OIL FUTURE CONTRACTS
Singapore-based Asia Pacific Exchange (APEX) witnessed the first exchange of futures for physicals (EFP) of its fuel oil futures contract on August 6, 2019, APEX said on its website.
Ocean Energy and a local trader converted 300 lots of FO1909 contracts into 3,000 mt of physical 380cst fuel oil and sold to it Sinopec Fuel Oil (Singapore) Pte Ltd.
The transaction was ascribed to large fluctuations in spot fuel oil prices when international crude prices were fluctuating sharply.
APEX launched the trading of fuel oil futures on April 11, 2019 and has since then recorded an average daily volume of around 26,000 lots (260,000 mt) and open interest of about 5,500 lots (55,000 mt), according to data from APEX. The contract provides a new hedging and investment tool for industrial players.
Established in 2018, APEX is the first Chinese-operated international exchange located outside China. It is also the third exchange approved by the Monetary Authority of Singapore with the “Approved Exchange” and “Approved Clearing House” license. To date, APEX has four listed contracts, comprising of energy, agricultural and financial products. In addition to EFP, the delivery methods of APEX contracts include the APEX warehouse receipt delivery, FOB delivery and cash settlement.
APEX is planning to launch low-sulfur fuel oil (LSFO) futures contracts in the near future, as such fuel will play a very important role in the energy and shipping industry after the International Maritime Organization implements a new sulfur cap for marine fuel in 2020.
(Source: JLC International Ptd Ltd)