CME Group to launch LNG DES Japan Futures Contract

UNITED STATES February 22 2016 4:33 PM

CHICAGO (Scrap Register): CME Group, has expanded its suite of energy product offerings with the introduction of a new LNG DES Japan (Rim) futures contract to begin trading effective on Monday. The new contract is now available for trading 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.

“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," said Alan Bannister, Executive Director of Energy Products, Asia Pacific, CME Group.  "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."

"This is an exciting development for the energy markets in Asia, and specifically for the Japan LNG markets," said Christopher Fix, Managing Director and Head of Asia-Pacific of CME Group.  "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."

"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," said Hisako Mori, President of Rim Intelligence. "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."

"Japan OTC Exchange, Inc. (JOE) welcomes this development, as the new LNG DES Japan (Rim) futures contract opens the gateway for LNG transactions on JOE with a world-class clearing service," said Takamichi Hamada, President & CEO of Tokyo Commodity Exchange (TOCOM) and Member of the Management Committee of JOE. "Thanks to the clearing service provided by CME Clearing, JOE can now provide its members with a risk management tool with improved safety, which I believe will lead to the further development of the LNG market in Asia."

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.