Bursa Malaysia clears first trades of new Asia UCO futures contract

Kuala Lumpur-based stock exchange Bursa Malaysia has cleared the first trades for its newly launched Platts-settled Used Cooking Oil FOB Straits futures contract (FUCO) Dec. 16.

A total of 32 lots were traded on the January contract at highs of $972.25/mt and lows of $969/mt, with the last trade of the session at $971.75/mt, Bursa Malaysia data showed. January settled the day at $971.75/mt, up from an open price of $970/mt.

A further ten lots traded for March, as trades reached as high as $929.25/mt while the low was seen at $928.25/mt, the same value as the last trade. Despite the lower trade, March settled at $934/mt, up from an opening of $929.25/mt.

The trades promptly followed the launch of the instrument by Bursa Malaysia Dec. 16, which settles against the Platts spot price assessment for UCO FOB Straits, demonstrating price of the feedstock out of Singapore and South Malaysia.

The FUCO contract reflects lot sizes of 25 mt of used cooking oil, with settlement in US dollars and trading permitted up to one calendar year forward.

The launch of the futures marks an end to a volatile year for UCO, after imposition of anti-dumping duties on imports of Chinese biodiesel and renewable diesel by the European Union in August. Additionally, the end of tax rebates on Chinese UCO exports from the start of December is expected to concentrate more of the feedstock in the APAC region for consumption by local biofuel producers.

Asian used cooking oil prices have spiked in December, as Platts, part of S&P Global Commodity Insights, assessed UCO FOB Straits at a nine-month high at $1,000/mt Dec. 16, up $135/mt, or 15.6%, from Nov. 1.

Tags: Malaysia