Dalian Commodity Exchange: The first contract delivery of pure benzene futures was successfully completed

China Net Finance, April 2—In March, after multiple procedures such as sampling and quality inspection, tank filling, and weighing, batches of pure benzene that met the futures delivery quality standards were transported out of the delivery warehouse. This marked the successful completion of the first contract delivery for pure benzene futures, BZ2603, with a delivery volume of 1,199 lots totaling about 3.60 million tons, and a delivery amount of RMB 264 million. All deliveries were made via rolling delivery: 1,078 lots via warehouse standard warrants and 121 lots via plant standard warrants. A total of 25 entity enterprises and 4 designated delivery warehouses participated. Against the backdrop of recent large overall volatility in the chemical sector affected by Middle East geopolitical tensions, the entire delivery process remained stable and orderly, earning unanimous recognition from market participants, and laying a solid foundation for better supporting high-quality development of the aromatics industrial chain in the next step.

Sinopec is the largest pure benzene production-capacity enterprise in China. As one of the first batch of delivery sellers, a person in charge of relevant business at Sinopec Chemical Sales Co., Ltd. said that this pure benzene futures delivery process went smoothly and the trading experience was also relatively good. In a situation where industry uncertainties are increasing, pure benzene futures delivery has expanded the company’s sales channels and promoted the transformation and upgrading of its traditional business model. As a core financial derivative tool, futures can provide the entire industrial chain with a more transparent and open price discovery mechanism, as well as more precise risk management services. While pure benzene futures help address mismatches in supply and demand and the challenges of inventory management, they also strengthen the development of the market’s credit system. In the future, the company will, in line with needs related to risk management and other businesses, continue to keep a close watch on the pure benzene futures market, conduct related work in accordance with laws and regulations, and help promote the healthy development of the pure benzene futures market and related industrial chains.

As one of the first batch of delivery buyers and one of China’s main importers and traders of pure benzene, Ren Ha o, Pure Benzene Manager at EverBright Oil & Chemical Co., Ltd., said that the company’s participation in the pure benzene futures delivery mainly involves using futures instruments to lock in the cost of purchasing forward raw materials and to stabilize the supply chain. At the same time, by leveraging standardized delivery, it ensures the quality of the source of goods and the certainty of delivery, giving the company greater confidence to better serve the upstream and downstream of the industry. This delivery connected the company’s pure benzene product new-model process as well as internal and external linkages, helping the company better understand the rules and logic of futures delivery, and laying a solid foundation for more in-depth development of basis-related and cash-futures combination business in the future. In addition, the entire delivery process was standardized, smooth, efficient, and transparent; whether it was delivery product quality, delivery and settlement efficiency, or capital security, everything was very reliable.

Cai Jian, Deputy General Manager of Changjiang International Yangzhou Petrochemical Storage & Logistics Co., Ltd. in Zhangjiagang Free Trade Zone, said that as one of the first batch of delivery warehouses and an important warehousing and logistics enterprise for bulk liquid chemical products, the company attaches great importance to this pure benzene delivery. It has continuously focused on safety management in storage, arranged dedicated personnel to be on duty, and stayed on-site throughout key steps including warehousing acceptance checks, sampling and quality inspection, and warrant registration. It has standardized operating procedures and strictly implemented requirements for the management of bulk-liquid hazardous chemicals, strengthening inspection and supervision at tank farm areas, process control, and risk prevention. With standardized operations and professional services, it ensures that the goods meet quality requirements, the quantities are accurate, and safety is controllable. The full on-site delivery process strictly followed Dalian Commodity Exchange (DCE) rules for pure benzene delivery, and advanced in an orderly manner by combining the operating specifications for bulk-liquid chemical storage. Overall, the process was smooth and the links between all stages were efficient, with no stalling, delays, or abnormal situations.

A person in charge of relevant business at Dalian Commodity Exchange said that to ensure the smooth delivery of pure benzene futures in the first month, since early this year the exchange has carried out a series of preparations by combining online and offline efforts. Before entering the delivery month, it confirmed that the delivery warehouses’ systems were effective, that the assigned delivery personnel were skilled in operations, and that onsite facilities were complete. After entering the delivery month, it provided full-process tracking and supervision of each delivery link in the first month to ensure delivery proceeded smoothly and in an orderly manner. Next, the exchange will, based on the experience from first-month deliveries, continuously optimize the delivery process, appropriately add delivery warehouses, expand delivery resources, and do a good job in industrial cultivation and service, supporting more pure benzene industry enterprises to carry out trading and delivery more effectively, and using futures instruments to stabilize production and operations.

(Edited by: Guo Jiandong)

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