PX, benzene derivatives volume on SGX surge 60%-70% on year

Singapore — PX and benzene swap volumes, which are cleared on the Singapore Exchange, totaled more than 8 million mt in 2020, with PX derivatives in 2020 growing by 62% in volume compared to 2019, while benzene derivatives were higher by 70% over the same period.

Both product derivatives peaked in March 2020 in terms of cleared volumes, with PX at 884,500 mt and benzene at 353,200 mt. This is the same time as when the coronavirus pandemic grew in severity in Asian markets, resulting in greater need for market participants to hedge amid uncertainty and volatility over the coming months.

Total annual PX volume traded on SGX was at 5.81 million mt in 2020, this marks an all-time high with the previous high at 3.994 million mt in 2018. Open interest stood at 690,700 mt at the end of December 2020, up from 426,000 mt in the same period in 2019.

Trading volume increased year on year every month throughout 2020, with the exception of July, as hedging needs increased along with volatility in the energy complex.

On top of a year-on-year gain in benzene derivative traded volumes, a consistent rise in open interest for the same contract was seen in second-half 2020, which peaked at 230,000 mt in November.

The PX and benzene derivative contracts are settled against the Platts CFR Taiwan/China and FOB Korea benchmarks respectively.