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Fastmarkets announces launch of two new China pulp futures

NOREXECO

NOREXECO already lists contracts for hardwood and softwood pulp delivered to Europe, as well as for recycled paper

Fastmarkets, the global commodity price reporting agency, and NOREXECO ASA, the international pulp and paper exchange, today announced that the exchange will launch two new cash-settled China pulp futures contracts on June 1 based on Fastmarkets RISI’s NBSK CIF China assessment and Fastmarkets FOEX’ PIX China BHKP Net index.

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 – all of which are settled against Fastmarkets FOEX indices. In addition, NOREXECO has listed a Shanghai Futures Exchange (SHFE) “mirror” contract on NBSK.

With the rapid rise of the importance of the SHFE pulp futures contract and its influence on global market pulp prices, these new contracts will provide international producers and global buyers the opportunity to hedge their exposure to future price swings for imported pulp into China, said Matt Graves, Senior VP of Indices at Fastmarkets.

The market will set daily closing prices and make visible a transparent forward curve available for all market participants.

This will be the first time that stakeholders in China will have access to a futures contract for hardwood, said Haidong Weng, Head of Strategic Business at Xiamen C&D Paper & Pulp. The new contracts will provide opportunities for cross-market hedging and arbitrage against SHFE and the hardwood/softwood spread.

NOREXECO is ensuring that Chinese companies can participate in trade via brokers (FIS) and clearing houses by providing an easy access route.

The two new China pulp contracts increase the opportunity to manage price risk for everyone exposed to price movements on pulp, said Stein O. Larsen, CEO at NOREXECO. They are a great addition to the NOREXECO product portfolio and open opportunities for both existing and new market participants at NOREXECO. Anyone seeking to reduce risks and/or exploit opportunities should contact us to get access to the market.

John Banaszkiewicz, Freight Investor Services CEO, added, we are pleased to be able to partner with NOREXECO on pulp futures and to drive forward development of the only dedicated market for pulp and paper.

He said: There is already a well-established onshore market in China, but we hope that the launch of these contracts will enable us to help develop this globally, growing both the offshore and onshore markets. We are especially keen to bring our experience and expertise of developing iron ore futures to the pulp market.

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