International derivatives marketplace CME Group Inc (NASDAQ:CME) is making a further step in its partnership with Japan’s provider of energy price and information services Rim Intelligence by introducing a new LNG DES Japan (Rim) futures contract.
The new contract, to start trading today, is available through Japan OTC Exchange and other OTC brokers, and for submission to CME Clearing through CME ClearPort. It is listed with and subject to the rules and regulations of NYMEX.
The LNG DES Japan (Rim) futures contract will be 10,000 MMBtu in size, and will be cash-settled referencing the Spot LNG Price Assessment – DES Japan (DJ) by Rim Intelligence.
Alan Bannister, Executive Director of Energy Products, Asia Pacific, CME Group, says,
“This new LNG DES Japan (Rim) futures contract will provide the markets an additional tool in managing LNG price risk, as the deregulation of the Japanese energy markets continues to pick up pace. At the same time, market participants trading this particular contract will now have greater flexibility in managing counterparty risk through submitting their trades to CME Clearing via the Japan OTC Exchange as well as through OTC brokers.”
Christopher Fix, Managing Director and Head of Asia-Pacific of CME Group, says,
“This is an exciting development for the energy markets in Asia, and specifically for the Japan LNG markets. Together with our partners Rim Intelligence, we are committed to continuously creating relevant risk management products to cater to the needs of our clients and the markets.”
Hisako Mori, President of Rim Intelligence, says,
“We hope that the launch of the LNG DES Japan (Rim) futures, the first of its kind in the world, will provide players involved in the LNG business with a wider range of trading options, including risk hedging opportunities. As Japan is the largest LNG importer in the world, DES Japan as a price index could well play an essential role in LNG trading going forward.”
CME Group has seen increased trading in energy futures amid heightened volatility. On February 9, 2016, CME Group reached a trading volume record for WTI Light Sweet Crude Oil futures, as well as an open interest record for RBOB Gasoline futures.
You can view the full announcement from CME Group on the new trading instruments by clicking here.