SPEX trades gas in Qianhai

Shenzhen Petrochemical Exchange (SPEX) launched spot trading of gasoline and diesel Monday, aiming to build itself into a new petrochemical financial platform by taking advantage of Shenzhen's Qianhai special economic zone.

On the first day of trading, the transaction value of 93-octane gasoline reached 90 million yuan ($15 million) and the regular diesel known as #0 diesel reached 73 million yuan, Nie Xuling, trading manager of SPEX, told the Global Times on Monday.

The gasoline price ended at 8,890 yuan per ton and the diesel price at 8,086 yuan per ton at market close Monday, up 0.25 and 0.35 percent respectively, reflecting the trend of crude oil in the international market.

About 200 registered members, of which State-owned and private refiners account for 50 percent each, participated in the first day's trading, Nie said.

SPEX counts Sinopec among its shareholder, and both the exchange and its registered members are all incorporated in Qianhai, a new financial zone for China's pilot scheme of yuan convertibility.

As some of the registered companies have overseas business, their participation will make the trading price more reflective of the international trend, Nie said.

She noted that an advantage of SPEX is to provide low-cost offshore RMB loans from Hong Kong by taking advantage of Qianhai, which charges only 3.5 to 4.5 percent annually compared with traditional bank lending's interest rate of 6 percent.

Apart from registered members, the exchange also has general membership and is open to individuals and corporations nationwide, Nie said.

The launch of spot trading is significant in terms of breaking the duopoly of PetroChina and Sinopec, enabling more private refiners and distributors to participate in pricing, said Zhang Bin, an analyst at Sublime China Information.

SPEX is not the only exchange that has launched spot trading of gasoline and diesel. The Xiamen Petroleum Exchange Center just initiated spot transactions for 93-­octane gasoline on Friday. The West Center of Shanghai Petroleum Exchange also started offering electronic spot trading of gasoline and diesel in July.

A bottleneck for these regional exchanges is the limited size of their trading ­volume, as the refined oil market is not open, with many resources controlled by PetroChina and Sinopec.

Spot trading enables customers to obtain products directly at the exchange without having to get it from refiners and distributors, Chen Peng, a manager at Shandong-based refiner Shtar Science & Technology Group, told the Global Times. Chen said the company would consider joining in spot trading given the benefits.

Wang Jintao, an analyst at commodity information provider chem365.net, said that the next step for exchanges is to launch futures trading of gasoline and diesel, which could help them gain pricing power.

All the exchanges that have launched spot transactions are backed by State-owned enterprises, Wang said.