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Straits Financial clinched the first trade for INE’s Low Sulfur Fuel Oil

Jun 21, 2020
Singapore, June 22, 2020

Straits Financial Services Pte Ltd (“Straits Financial”) successfully clinched the first trade for the low sulfur fuel oil futures contract, upon launch today on the Shanghai International Energy Exchange (“INE”). The trade was executed on behalf of Sinopec Fuel Oil (Singapore) Corporation Limited (“Sinopec”), through Xinhu Futures Co., Ltd (“Xinhu Futures”). 

The low sulfur fuel oil futures contract is the third internationalized futures product launched by INE. Similar to previous crude oil and TSR20 rubber futures, the contract is yuan-denominated, physically settled and open to foreign investors. Since 2019, the world economic situation is facing a confluence of risks and the Covid-19 pandemic brings huge uncertainty to the world’s economy and the crude oil market. There is a greater need for risk aversion in the boned marine oil industry. The introduction of low-sulfur fuel oil futures can enable relevant oil enterprises to participate in hedging and provide more powerful risk management tools for their operations.

Sinopec Fuel Oil (Singapore) Co., Ltd. is a wholly-owned subsidiary of Sinopec Fuel Oil Sales Co., Ltd., established outside China, its participation in low sulfur fuel oil provides a precise tool to hedge risk and manages pricing and risk management issues in its trading process.

Straits Financial is one of INE’s overseas intermediaries and with the support of Xinhu Futures, it has previously secured many first trades of the internationalized products upon launch, including the crude oil futures, iron ore futures and TSR 20 futures.

"With the introduction of internationalized futures, more international investors will enter  the Chinese market. We are pleased to be part of this development and continue to provide our clients with a more comprehensive range of product offerings and trading access." said Roger Quek, Managing Director of Straits Financial.

Yang Xidong, General Manager of Xinhu Futures, believes that China is a large producer and consumer of low-sulfur fuel oil, and the introduction of international varieties of low-sulfur fuel oil futures is conducive to the formation of China's position as a pricing center of low-sulfur fuel oil. It also provides China a stronger voice in the pricing of low-sulfur fuel oil, and has far-reaching significance for the construction of the "One Belt, One Road” initiative.

About Sinopec Fuel Oil (Singapore)

Sinopec Fuel Oil (Singapore) Co., Ltd. is a wholly-owned subsidiary of Sinopec Fuel Oil Sales Co., Ltd., established outside China, with the aim of opening up international markets, expanding overseas trade volume and enhancing Sinopec's overall international competitiveness. Sinopec Fuel Oil Sales Co., Ltd.’s core business focuses on providing oil products and services for global trading vessels, with operations in both domestic and international markets. With its international resources, Sinopec Fuel Oil Sales Co., Ltd. actively expands its business in oil supply for domestic trading, bonded ships and overseas ships.

About Straits Financial

Headquartered in Singapore, Straits Financial Group is the brokerage house under CWT Pte. Limited that offers a full spectrum of derivatives & OTC products, including trade facilitation for physical commodities. Established affiliate offices are in Chicago, New Jersey, Shanghai and in Jakarta. Straits Financial is a full Clearing Member of the Chicago Mercantile Exchange (CME), Chicago Board of Trade (CBOT), New York Mercantile Exchange (NYMEX), the Commodity Exchange (COMEX), CME Clearport, Dubai Mercantile Exchange (DME), CBOE Futures Exchange (CFE), and Asia Pacific Exchange (APEX). It is also the first batch of Overseas Broking Special Participant of the Shanghai International Energy Exchange (INE). Straits Financial offers clearing access to all major global commodity exchanges. For more information, visit www.straitsfinancial.com.

About Xinhu Futures

Founded in 1995 and based in Shanghai, China. Xinhu Futures Co.,Ltd. operates nationwide with 26 branches, as well as one risk management business subsidiary and a global business subsidiary based in HK. Xinhu Futures is the clearing member of the Dalian Commodity Exchange (DCE), Zhengzhou Commodity Exchange (ZCE), Shanghai Futures Exchange (SHFE) and Shanghai International Energy Exchange (INE). Xinhu Futures is also the general clearing member of China Financial Futures Exchange (CFFEX).

By integrating the resources and advantages of derivatives, fintech, legal advice and other multi-dimensional aspects, Xinhu Futures is committed to providing one-stop consulting, training and trading services for foreign investors to enter the Chinese futures market, and has achieved certain achievements through overseas intermediaries or direct assistance to foreign clients to participate in the Chinese futures market.

DISCLAIMER: This document is issued for information purposes only. This document is not intended, and should not under any circumstances to be construed as an offer or solicitation to buy or sell, nor financial advice or recommendation in relation to any capital market product. All the information contained herein is based on publicly available information and has been obtained from sources that Straits Financial believes to be reliable and correct at the time of publishing this document. Straits Financial will not be liable for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information. Trading commodity futures and options products presents a high degree of risk, and losses in excess of your initial investment may occur. Past performance or historical record of futures contracts, derivatives contracts, and commodities is not indicative of the future performance. The information in this document is subject to change without notice.  The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.