Shandong Chambroad Petrochemicals Co successfully sold 4,000 metric tons of diesel to be delivered in a month's time through the capacity pre-sales model of the Zhejiang Mercantile Exchange in Zhoushan, East China's Zhejiang province, on Aug 30.
On the same day, after an open inquiry, Chambroad purchased 32,000 barrels of crude oil call options from Guotai Jun'an Risk Management Co, marking the first futures stable-price order business for diesel in the country.
The person in charge of Chambroad stated that the diesel futures stable-price order is convenient and cost-effective, and further reduces risk management costs.
The landing of the diesel futures stable-price order is another welcome achievement after the Shanghai Futures Exchange and the Zhejiang Mercantile Exchange successfully implemented an asphalt futures stable-price order in 2022. It will effectively leverage the functions of the futures market to serve the real economy and support supply guarantee and price stability of diesel products.
The physical enterprise pre-sells diesel products, purchases off-exchange options to manage price risks, and the risk management subsidiary of the futures company hedges risks through the Shanghai Futures Exchange crude oil futures, achieving close linkage between the futures and spot markets and assisting enterprises in stable operations.
In July this year, the "Promotion of the Futures Stable-Price Order Business Model to Advance the Construction of the Integrated Oil and Gas Trading Market in the Yangtze River Delta Region" launched by Zhoushan was selected as one of the first provincial-level innovations for institutional reforms in the 2023 Zhejiang Pilot Free Trade Zone.