Overseas customers: milestone event! Overseas delivery attracts more foreign institutions to participate in China's futures market
Trafigura Singapore is honored to participate in the first batch of transactions for the overseas delivery of low-sulfur fuel oil futures at the Shanghai International Energy Exchange. As far as we know, this is also the first time that the Chinese futures market has launched an overseas delivery model. Low-sulfur fuel oil, as the first overseas delivery product to land, undoubtedly provides valuable experience and reference for the overseas practice of other Chinese futures contracts (including but not limited to oil contracts).
We feel that as warehouse receipts can be transferred to overseas for delivery under certain conditions, foreign institutions will have stronger incentives to participate in the Chinese futures market. For example, this time, Trafigura used the low-sulfur fuel oil warehouse receipts it held to successfully extract 1,500 tons of low-sulfur fuel oil spot in Singapore through the exchange group factory warehouse. By picking up the cargo in Singapore, the warehouse receipt can match the spot demand of our joint venture company TFG Marine in time. We have arranged to rent a ship from TFG to pick up the spot and fill it directly on the international tanker.
In addition, we believe that while overseas delivery provides convenience for international investors, it also helps domestic futures participants have a clear understanding of international market dynamics. In fact, the domestic investors can also intuitively understand the domestic and foreign price differences of related products through the daily release of premiums and discounts for off-site delivery on the exchange’s website. This information can help investors better participate in the related contract transactions.
FREEPOINT COMMODITIES SINGAPORE PTE.LTD.，
The successful launch of the "Domestic Delivery + Overseas Delivery" business of low-sulfur fuel oil futures at Shanghai International Energy Exchange is a milestone event in the internationalization of China's futures market delivery. It increases the opening degree and international pricing influence in China's futures products. This is an important measure which shows a demonstration of China's futures products directly serve the interconnection of the "Belt and Road" and it is also a concrete practice of China's futures products in response to the new pattern of mutual promotion of domestic and international markets.
FREEPOINT COMMODITIES SINGAPORE PTE.LTD. and its strategic partner, the international marketing and trading department of (PERTAMINA, took delivery of 1,000 tons of low-sulfur fuel oil at the UT storage terminal in Singapore on January 20, 2021. The 1,000 tons of low-sulfur fuel oil comes from the overseas delivery warehouse of the low-sulfur fuel oil futures contract of the Shanghai International Energy Exchange and will be supplied to the marine fuel oil market after the completion of the cargo consolidation on the Indonesian island of Sambu and the south of the Singapore Strait. Looking to the future, FREEPOINT plans to continuously optimize its own logistics costs and inventory allocation through the channel of overseas delivery of low-sulfur fuel oil futures.
CBNB successfully participated in the first batch of “domestic delivery and overseas delivery” of low-sulfur fuel oil futures at the Shanghai International Energy Exchange and delivered 1,000 tons of low-sulfur fuel oil at the UT storage terminal in Singapore.
CBNB believes that the development of the "domestic delivery + overseas delivery" business of low-sulfur fuel oil futures is a strong proof of the higher level of open development of China's derivatives market. This business model can expand the trade channels for the real economy, improve the efficiency of resource allocation and realize multi-level risk management of domestic and international, futures and spot, online and offline linkages, this is conducive to the formation of a more scientific and reasonable pricing mechanism for the industry and boosts China’s pricing influence on the important commodities.
After CBNB joined the international oil product trading industry, it quickly deployed an international trading and trading team in Singapore to carry out low-sulfur fuel oil related businesses. The launch of the cross-border delivery business of low-sulfur fuel oil has also helped CBNB open up new business development ideas and transformation directions, which is conducive to promote the integration and co-construction of the group's domestic and foreign teams. In 2021, CBNB plans to continue to participate in the international oil product trade through new cross-border settlement channels and further coordinate domestic and international market resources.
我们觉得随着仓单在特定条件下流转到境外提货成为可能，境外机构参与中国期货市场的动力会更强。比如此次境外提货，托克用持有的低硫燃料油仓单通过交易所集团厂库在新加坡顺利提取1500吨的低硫燃料油现货。通过在新加坡的提货，使得仓单可以及时匹配我们合资公司 TFG Marine的现货需求，我们已安排用TFG的一艘期租驳船来提取该笔现货，并将它直接加注到国际油轮上。