Singapore Exchange (SGX) launches SM, MEG futures/swaps

SINGAPORE (ICIS)--The Singapore Exchange (SGX) has launched new styrene monomer (SM) and monoethylene glycol (MEG) futures and swaps contracts.

The launch of SM and MEG futures and swap contracts on a CFR (cost and freight) China basis this month is “in response to strong market demand to complement the existing suite of [SGX] products and provide a more complete set of risk management tools, especially for the styrene and polyester industry”, according to SGX.

This will be the first time derivative contracts for SM and MEG have been offered by any clearing house in Singapore.

The swaps are to be traded in 500 mt lots, while the futures contracts will trade in 100 mt increments.

"SM and MEG have traditionally been traded on an over-the-counter (OTC) basis between counterparties," an SGX spokesman said. In addition, SGX will also be able to provide a single clearing arrangement for clients to trade and clear with multiple counterparties.

The underlying prices for the contracts will based on ICIS’ MEG and SM price assessments.

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