15 November 2007 20:37 [Source: ICIS news]
ANTWERP (ICIS news)--Next year will see triple the current volume of aromatics financial swaps traded, a senior commodities trader said on Thursday.
“We’ve traded 300,000 tonnes of benzene - in Europe, the ?xml:namespace>
Other banks had also been trading similar volumes of financial swaps because of their exposure to the refinery business, he said at the 6th European Aromatics and Derivatives Conference.
Barclays was also trading spreads, such as the spread between PX and polyethylene terephthalate (PET), and was now looking for aromatics companies to be on the sell side.
“No one is interested to sell (aromatics swaps) forward because they’re expecting price increases,” Paul added.
Aromatics had been going through the biggest change in 50 years, due to the rocketing crude oil price, the expansion of
Extreme volatility had been a feature of all commodity markets in the last five years, but other markets already had mature hedging tools to help them cope with it.
Trading in oil and gas had grown by a factor of five or six in the last five years, and price volatility had been compounded by the entry into these markets of financial players with very different motivation to that of oil and petrochemical companies.
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