OREANDA-NEWS. SGX petrochemical products have received strong support from customers since their introduction in December 2014. June 2016 saw a record 200,500MT of Paraxylene cleared and with 323,500MT of month-end open interest. To further boost customer adoption, we are pleased to introduce the following initiatives.

  1. SGX PX-Naphtha Spreads

SGX PX-Naphtha Spreads, which are the price differentials between SGX Paraxylene CFR Taiwan/China Swaps (SGX PX) and SGX Naphtha CFR Japan Swaps* (SGX NJ), have been frequently used to indicate the refining margin of naphtha crackers and aromatics producers. To enhance the convenience of trading these spreads, SGX is pleased to provide a convenient way for your interdealer-broker (IDB) to book the trade.

Spread prices are quoted as a price differential between PX and NJ. Buying a spread means buying PX and selling Naphtha and vice versa.
Example:
- Buy 1,000mt of July 2016 PX-Naphtha spread @ US$380 (PX reference price = US$820 per mt)
This is equivalent to:
- Buy 1,000 mt of July 2016 PX Swaps at US$820 per mt; and
- Sell 1,000 mt of July 2016 Naphtha Swaps at US$440 per mt (US$820 – US$380)

After a spread is traded, your IDB will register the spread into SGX using a single clearing account with a SGX Clearing Member.  The trade will be registered as a 2-legged spread pair and traders have the flexibility to unwind the trade as a 2-legged spread pair or close out as individual legs. SGX BZ-Naphtha Spreads can also be traded in the same way.

  1. Margin Efficiencies

PX-NJ and BZ-NJ spread positions on SGX will enjoy margin savings of up to 30% and 50% respectively.

  1. Naphtha Fee Waiver

SGX is pleased to provide a waiver of SGX Exchange Clearing Fees and Final Settlement Fees for all Naphtha CFR Japan products – NJ and NJF – for 6 months starting from 1st August 2016. Extension of the fee waiver will be subject to review.