TOCOM launches oil physical market and begins publication of oil physical index prices

The Tokyo Commodity Exchange, Inc. (TOCOM) announced that it received regulatory approvals from the Minister of Agriculture, Forestry and Fisheries as well as the Minister of Economy, Trade and Industry to “launch an oil physical market as a concurrent business of a commodity exchange”. The Exchange plans to start operations on January 11, 2017.

For petroleum products such as gasoline and kerosene, supply and demand imbalances inevitably occur due to weather and seasonal circumstances and similar uncertainties in the petroleum products industry. TOCOM will continue with its mission to support Japan’s industrial infrastructure with a regulated physical market. The market will help participants to mitigate such imbalances and associated risks. Execution prices will be used to determine the settlement of cash-settled oil futures contracts slated for listing in May 2017 at TOCOM. The Exchange expects the result to be a useful new price index and will contribute to reinvigorating the existing oil futures market.

Oil physical market transactions completed by TOCOM Members and the oil industry on an online bulletin board. Trade prices will be published on the Exchange website.

Outlook of the TOCOM Oil Physical Transactions Market

The listed oil physical contracts will be: Gasoline, Kerosene, Gas Oil, Bunker A and LSA (Low Sulphur Bunker A) for delivery by maritime shipment or at a refinery. For Bunker A and LSA, off floor trading will be conducted in the market for kerosene, which has similar qualities.

Products Place of Shipment Contract Unit
by Maritime Shipment
Gasoline Refinery (Keihin, Chukyo, Hanshin, Ohnishi) 100kl
Gasoline Storage facility (Keihin)
Kerosene Refinery (Keihin, Chukyo, Hanshin, Ohnishi)
Gas Oil Refinery (Keihin, Chukyo, Hanshin, Ohnishi)
Bunker A Refinery (Keihin, Chukyo, Hanshin, Ohnishi)
LSA Refinery (Keihin, Chukyo, Hanshin, Ohnishi)
at Storage Facility
Gasoline Refinery (Keihin, Chukyo, Hanshin, Ohnishi) 10kl
Kerosene Refinery (Yokohama, Kawasaki, Chiba, Chukyo, Hanshin)
Gas Oil Refinery (Yokohama, Kawasaki, Chiba, Chukyo, Hanshin) 100kl
Bunker A Refinery (Yokohama, Kawasaki, Chiba, Chukyo, Hanshin) 10kl
LSA Refinery (Yokohama, Kawasaki, Chiba, Chukyo, Hanshin)
Type of Trade Standard Delivery by Maritime Shipment Standard Delivery at Storage Facility Non-Standard Delivery at Storage Facility
Market Participants TOCOM Window Registered Users
Trading Hours From 8:45 to 15:15 JST
Product Types Gasoline, Kerosene, Gas Oil, Bunker A, LSA
TOCOM Designated Place of Shipment ・ Keihin Refinery
・ Chukyo Refinery
・ Hanshin Refinery
・ Ohnishi Refinery
・ Keihin Storage Facility (TOCOM designated)
・ Yokohama, Kawasaki Refineries
・ Chiba Refinery
・ Chukyo Refinery
・ Hanshin Refinery
・ No designated facilities
(All refineries and
storage facilities can be used.)
Contract Unit All Products: 100 Kiloliter Gasoline, Kerosene, Bunker A, LSA: 10 Kiloliter
Gas Oil: 100 Kiloliter
Price Increment JPY 10 per Kiloliter
Exchange Fee JPY 50 per Kiloliter
* JPY 100 per Kiloliter for a Trade on credit or COD (Cash-on-delivery) Storage Facility trade

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