NOREXECO Launches China Softwood And Hardwood Pulp Futures Based On Fastmarkets Prices
NOREXECO ASA, the international pulp and paper exchange, launched two cash-settled China pulp futures contracts on June 1 based on Fastmarkets‘ prices to meet growing demand for hedging in the international pulp market.
The contracts, one for softwood pulp and one for hardwood pulp, are settled against the monthly averages of Fastmarkets RISI’s NBSK CIF China assessment and Fastmarkets FOEX’ PIX China BHKP Net index. These prices reflect trade in the offshore contract market, where imported pulp is sold to traders and end users on a cost, insurance and freight (CIF) basis for delivery to main ports in China.
Pulp futures are designed to help market participants manage their exposure to price risk. NOREXECO already lists contracts for hardwood and softwood pulp delivered to Europe, as well as for recycled paper. These are also settled against Fastmarkets FOEX indices. In addition, NOREXECO has listed a Shanghai Futures Exchange (SHFE) “mirror” contract on NBSK.
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“The two new contracts enable anyone with exposure to pulp delivered to China to hedge out unwanted risk,” said Stein O. Larsen, chief executive officer at NOREXECO. “We can also announce that clearing and transaction routes for accessing the international NOREXECO market are opened for both Asian and international traders. We are glad to have with us strong partners like StoneX and Freight Investor Services (FIS) to help bring market participants into the market.”
The market will set daily closing prices and make visible a transparent forward curve available for all market participants.
“These new contracts have real potential to become liquid between now and year’s end given the strong interest we’ve seen from stakeholders,” said Matt Graves, senior vice president at Fastmarkets.
NOREXECO is ensuring that Chinese companies can participate in trade via brokers and clearing houses by providing an easy access route.
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