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Shanghai INE mulls Singapore port as delivery location for LSFO futures contracts

19 Nov 2020

China’s Shanghai International Energy Exchange (INE) is considering utilising PetroChina Co’s marine fuel storage in Singapore as a delivery location for its low sulphur fuel oil (LSFO) futures contracts, reports Reuters. 

The Shanghai INE published a notice on its website on Tuesday soliciting market feedback on allowing LSFO futures contract buyers to receive deliveries outside China, but did not specify a location or a start date for the change.

However, sources told Reuters Singapore port was among locations considered by Shanghai INE.

If implemented, this would mark the first time a futures contract in China can be deliverable outside of China, and would boost liquidity and flexibility for the contracts, as well as help to influence pricing for bunker fuel. 

The Shanghai INE gained approval from the China Securities Regulatory Commission to list its LSFO futures contracts in June this year, and at that time the Commission specified the fuel in contracts open for trade must be of domestic origin.

Related: Shanghai International Energy Exchange confirms listing date of LSFO futures contracts
Related: China Securities Regulatory Commission approves INE’s LSFO futures contracts
Related: Shanghai INE VLSFO futures project enters milestone, trading simulations to start in June

Photo credit: Edward-he
Published: 19 November, 2020

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