China's commodity bourse ZCE set to launch PX futures contract Sep 15 denominated in yuan

China's Zhengzhou Commodity Exchange, or ZCE, announced on its website Sept. 8 that it will launch its paraxylene futures contract on Sept.15, trading in lots of 5 mt and denominated in yuan.

The contract, with the physically delivery method, would have the place of delivery as an "Exchange Designated Delivery Location," ZCE said. Trading would take place in two to three main sessions, with the first session taking place over 9:00-11:30 am local time (0100-0330 GMT) and the second over 13:30-15:00 pm (0530-0730 GMT). Trading would take place from Monday to Friday and "other times as specified by the exchange," it added.

The first batch of paraxylene futures contracts listed for trading are PX2405, PX2406, PX2407, PX2408 and PX2409, ZCE announced on its website.

"The trading margin standard for a paraxylene futures contract is 12%, a source said, adding that "the stop range is plus/minus 10%."

The PX futures contract has been highly anticipated by China's purified terephthalic acid makers, as it will help them hedge their price risk, according to sources. However, the place of the physical delivery of PX cargoes has been a topic of debate for the market and is yet unspecified by ZCE.

A market source said that as the contract is quite new, traders are not fully sure about how to trade on the contract, adding that they will move carefully, as the mechanism of physical delivery is not fully clear as yet.

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