UPDATE: China to commence Shanghai crude oil futures, petchem players concerned

After years of delays, China has set the official launching date of its own oil futures contract on 26 March 2018. The Shanghai International Energy Exchange INE will allow both domestic and international investors to lock in oil prices and pay in local currency. Seven crude oil grades will be deliverable, including Dubai crude, Oman crude, Basrah light oil and China’s Shengli oil.

While the new futures contract gains tremendous attention from oil market participants, players in the polyolefins sectors are no less concerned. Most discussion at the moment centred on a possibility that local futures traders would be more interested in oil contracts on Shanghai International Energy Exchange, instead of PP and LLDPE contracts on Dalian Commodity Exchange. Given the influence futures PP and LLDPE have on local spot market, Chinese players are closely monitoring the development before making fresh buy decision.