Dalian, Liaoning – China’s first ethylene glycol (EG) futures product was launched on the Dalian Commodity Exchange (DCE) on December 10.
Total transaction on the first trading day was CNY40.2bn ($5.8bn), with prices for its six contracts ranging from CNY5,597/t to CNY5,687/t. The most a price can change from day to day is 4% of the previous trading day’s settlement price.
China consumes more ethylene glycol than any other country. It is highly dependent on imports, and the market experienced price fluctuation of more than 40% last year, according to DCE’s website. In 2017, the country imported 8.7m tons EG at a total value of $7.4bn according to China Customs.
DCE has adopted a new national quality standard GB/T4649-2018, which came into effect in December 2018. The standard separates EG into polyester grade and industrial grade. Ethylene glycol delivered needs to meet 13 polyester grade standards. This effectively precludes coal-to-ethylene glycol products from the contracts.
China’s coal-to-ethylene glycol production is fairly small, comprising 8.8% of its apparent EG consumption, and the downstream demand is unclear, said a DCE announcement.
Currency Conversion: Xe.com