Sinopec ‘Donghai’ Asphalt obtained approval from the Shanghai Futures Exchange for registration on 31 October, marking the debut of China’s biggest asphalt producer and Sinopec’s first brand registered at the exchange.
‘Donghai’, with an annual production volume of 8 million t, controls a domestic market share of 29% and exports to 17 countries across five continents. ‘Donghai’ asphalt is the material of choice for several of China’s most significant projects, including Beijing’s Chang’an Avenue, Beijing Daxing International Airport, Xiong’an New Area, the Winter Olympic Games and the Shanghai F1 International Circuit.
Asphalt is a commodity futures product linked closely to the international crude market. Since their debut in 2013, asphalt futures contracts have become actively-traded instruments in China’s futures market. As an important risk-hedging tool, asphalt futures can help companies in the petrochemical industry or those engaged in road construction to mitigate risks by locking in cost or profit.
In step with the plan of further opening China’s energy sector, Sinopec worked together with the Shanghai Futures Exchange to create the ‘Donghai’ Asphalt Futures Product.
Sinopec Refinery Sales Co., a Sinopec unit, in preparation for the registration of the brand, worked in coordination with five Sinopec asphalt-producing subsidiaries to create a futures product of high-stability.
The move can bring future asphalt prices closer to spot prices, enabling clients to buy asphalt using either market, thus, speeding up circulation of the commodity, and improving risk-hedging and price-discovery functions of asphalt futures.
Through partnerships with overseas engineering projects and long-term contracts, ‘Donghai’ Asphalt exports to 17 countries, including a dozen Belt and Road nations such as Vietnam, Malaysia, Indonesia, Pakistan and Zambia. In the first nine months of 2019, ‘Donghai’ Asphalt exported 500 000 t of asphalt.
The debut of ‘Donghai’ Asphalt represents Sinopec’s endeavour to actively participate in the three major petrochemical futures products – crude oil, fuel oil and asphalt and provides a foundation for new futures products in liquefied gas, gasoline and diesel.
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/31102019/sinopec-registers-first-brand-at-the-shanghai-futures-exchange/