US’ ICE launches first ICIS-linked propylene futures contracts

SINGAPORE (ICIS)–The Intercontinental Exchange (ICE) this week launched its first Asia propylene futures contracts based on price assessments by ICIS.

The two monthly cash-settled contracts launched – Propylene ICIS NE (northeast) Asia Futures and Propylene ICIS SE (southeast) Asia Futures – are based upon the average of the daily prices published by ICIS and quoted on a cost and freight (CFR) basis per metric tonne of propylene for delivery.

Propylene is the raw material to produce polypropylene (PP), a widely produced commodity plastic, with applications in many household items, clothing, and other consumer products.

The launch of the Asia propylene futures contracts follows ICE’s launch of its first ethylene futures contracts for the region on 13 December last year, it said in an earlier statement.

“These new contracts will provide a direct hedge for the market to manage its ethylene exposure on the water from the Gulf Coast to Asia,” said J.C. Kneale, Vice President, North American Gas and Power at ICE.

“There is tremendous demand from Asia for these contracts given the role ethylene plays in the plastics and packaging manufacturing industry.”

The ethylene futures contracts are based on ICIS daily assessments quoted on a CFR NE Asia and SE Asia basis per metric tonne of ethylene for delivery.

Ethylene is one of the key ingredients to make plastic, polyvinyl chloride (PVC), polyethylene, and ethylene glycol used in polyester and antifreeze.

ICE is the party responsible for the management, monitoring and regulation of all trading activity for ICE’s US futures markets.