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CME to start trading benzine futures next month

The Chicago Merchatile Exchange (CME) and internet marketplace CheMatch will start offering benzine futures contracts from 21 Septemeber. At the same time, the pair will also offer mixed xylene futures.

    • 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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