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CME to start trading benzine futures next month

    • Christopher Jeffery
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The futures will be tradable on the CME exchange as well as through an eletronic link to CheMatch's business-to-business marketplace.

"Chemical futures trading is a new frontier in the derivatives sector," said CME chairman Scott Gordon. "These new futures contracts represent a new line of risk management tools."

His comments were echoed by CheMatch president Larry McAfee, who said: "The ability to hedge intermediate and downstream products using regulated futures is an important milestone for the chemical industry."

Benzene and mixed xylenes are essential components in a number of industries, including the plastics business, and prices can at times be volatile.

Each CME-CheMatch futures will represent 42,000 gallons of the benzene or xylene and will be cash settled at contract expirations to an index of monthly prices compiled by Houston-based petroleum consulting firm DeWitt & Company.

CheMatch's strategic investors include venture capitalist firm Battery Ventures, along with leading chemical firms like Bayer, DuPoint, Methanex and Milllennium Chemicals, among others.

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