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EG Futures Listed on DCE on Dec. 10

Date:12 December 2018
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The Ethylene Glycol (EG) futures is officially listed on Dalian Commodity Exchange (DCE) on December 10. Luo Hongsheng, Director of the Department of Futures Supervision of the China Securities Regulatory Commission (CSRC), delivered a speech on behalf of the CSRC Vice Chairman Fang Xinghai; Jin Guowei, Deputy Mayor of Dalian, Fu Xiangsheng, Vice President of the China Petroleum and Chemical Industry Federation (CPCIF), and DCE Chairman Li Zhengqiang made a speech successively.

Luo Hongsheng said in the speech that China is the largest chemical fiber producer and consumer in the world. EG is one of the basic raw materials for chemical fiber and also a key link connecting two pillar industries in the national economy -- the petrochemical in the upstream and the polyester fiber in the downstream. The listing of EG futures is of great significance for serving the risk management of relevant enterprises, promoting the industry structure upgrading and optimization and enhancing the Chinese EG futures’ pricing influence in the world; and the EG futures and the PTA futures will complement each other to provide the polyester fiber industry with a more complete and more comprehensive raw material risk-avoiding instrument system and facilitate the sound development of relevant industries. DCE should make good market supervision and risk prevention for EG futures to ensure its stable operation, and it should guide industry enterprises to make use of the futures market to manage risks, thus promoting the full functioning of EG futures. In the future, the CSRC will continue its efforts in the reform, opening-up, development and stability of the futures market, accelerate the launching of more qualified futures and options that meet the needs of the real economy, promote the internationalization of mature futures products, and optimize relevant rules and systems and effectively manage and control risks, so as to contribute its share to supporting the construction of a modern economic system in China and serving the high-quality development of the national economy.

Jin Guowei said that DCE is one of the 4 futures exchanges established upon the approval of the State Council; its trading volume and trading turnover rank top 10 among major derivatives exchanges in the world; and it has played a crucial role in displaying the futures market’s role in serving the real economy development. In recent years, DCE has solidly remembered the requirements of General Secretary Xi Jinping and made new breakthroughs under the support of the CSRC and other superior authorities, such as taking the initiative in launching the 1st commodity futures options in China and being the first in realizing the opening-up of a listed futures product. The EG futures listed today will satisfy the risk management demand of the chemical industry, increase the international pricing influence of the Chinese EG futures, serve and guarantee the sound, stable and high-quality development of relevant industries. Next, the Dalian Municipal People’s Government will give full play to the leading role of DCE, support its research, development and listing of new products and businesses, encourage the development of futures market trading participants, offer financial support to newly-established and newly-introduced legal futures companies for 5 consecutive years, and attract relevant futures institutions to gather in Dalian and seek joint development.

Fu Xiangsheng said that China is the largest EG importer and consumer in the world, and the listing of EG futures is of far-reaching significance for further displaying the futures market’s role of serving the real economy, satisfying the risk management demand of the chemical industry, and guaranteeing the sound, stable and high-quality development of the chemical industry. DCE and the CPCIF have carried out a series of research on the listing of petrochemical futures products since 2006, such as LLDPE, PVC and PP. Centering on the listed futures products, DCE and the CPCIF have organized industry meetings and carried out surveys and trainings regularly, making innovative trading modes like basis trading and over-the-counter options the mainstream trading methods of the synthetic resin industry and greatly increasing the futures market’s effectiveness of serving the real economy. Currently, only a few petrochemical products have been listed in the Chinese futures market, far from satisfying the demand of avoiding price risks, stabilizing expected return and hedging of petrochemical enterprises and downstream enterprises. He hoped that DCE would deeply engage in the petrochemical industry, further accelerate the pace of listing new products, and keep expanding to the upstream and the downstream of the petrochemical industry, thus making new contributions to the construction of a comprehensive price risk management system for the petrochemical industry.

Li Zhengqiang pointed out that EG futures is the 17th futures product and the 4th chemical product listed by DCE. Its listing marks an important exploration of optimizing the petrochemical futures products system and expanding the width and depth of serving the real economy, and a significant action of deeply promoting the diversified and open strategic transformation according to the principle of “consolidating, enriching and improving” after the listing of soybean meal options, the iron ore futures internationalization and the over-the-counter market construction by DCE. Next, it will earnestly implement the requirements of the CSRC and, under the support of relevant parties, well manage the listing and maintenance work for EG futures, with an aim of safeguarding the smooth operation of the market, keeping consolidating market basis and striving to display greater role in serving the market. Under the prerequisite of ensuring the safe and smooth market operation, DCE will accelerate the launching of more new instruments and products, continue to improve listed products, strengthen the efforts on integrating the over-the-counter businesses like commodity swap, warehouse receipt swap and basis trading, and steadily expand the opening-up of the market, thus making contributions to the futures market better serving the real economy and the Chinese high-quality economic development.

Luo Hongsheng and Jin Guowei beat the gong for the listing of EG futures at the listing ceremony; Yan Shaoming, Deputy Director of the Department of Futures Supervision of the CSRC, read out the reply document; DCE CEO Wang Fenghai presided over the ceremony. Among those attending the listing ceremony were staffs from relevant national ministries and commissions and the Dalian People’s Government, and representatives from the securities and futures regulatory system, the CPCIF and other industry associations, enterprises in the chemical industry chain, financial institutions and news media.

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