Exchange commodity trading in Russia SPIMEX

Transcription

1 Exchange commodity trading in Russia SPIMEX

2 1 SPIMEX: Russia s largest commodities exchange Profile Saint-Petersburg International Mercantile Exchange (SPIMEX) License Charter capital: RUB 435 mn SPIMEX was incorporated in by: Transneft, Transnefteproduct, Rosneft, Gazprom Neft, Zarubezhneft, Surgutneftegaz, Sovcomflot, Russian Railways and others. Clearing house: Settlement Depository Company (SDCO), St. Petersburg International Mercantile Exchange (SPIMEX). Settlements are effected by 8 authorized banks: Sberbank, VTB Bank, Gazprombank, Alfa-Bank, Rossiya Bank, RRDB, Russian Agricultural Bank and National Settlement Depository. Advanced and liquid refined products market: over 119 million tons traded annually. Number of trading participants: Price indices calculation: based on exchange and OTC transactions in commodities. Futures market for exchange-traded refined products and crude oil. Slide 2 Registration of OTC transactions for crude oil, refined products, LPG, coal and grain.

3 1 Market share and volume traded as of 30 of June 2018 SPIMEX is Russia s the largest commodities exchange. Refined products are the largest segment of domestic commodities market. The share of SPIMEX in all exchange-traded refined products in Russia stands at 98%. Since 2008 more than 118,65 million tons of refined products were traded via SPIMEX. In 2013, SPIMEX launched trading in crude oil. The sellers include ZarubezhNeft, TransNeft and Bashneft. The volume trade since launch stood at 3,365 mln tons. (47,5 bn ) In December 2010, the SPIMEX Derivatives Market started trading in deliverable and settlement contracts of refined products. Volume traded since then has amounted to 1,852 million contracts (64,9 bn ). Timber trading started in July Volume traded since then has amounted to 728 bn Slide 3 In October 2014, the SPIMEX Natural Gas Market launched month ahead trading. The trading participants include largest domestic suppliers (Gazprom Mezhregiongaz, Rosneft, NOVATEK) and natural gas end consumers. Volume traded amounted to 54,2bcm. (157,2bn )

4 1 Trading activity All markets Volume Traded (bn ) Number of contracts Slide * Including the Futures Market ( as of 30 June 2018)

5 2 Refined Products Advanced and liquid refined products market Slide 5

6 2 Refined Products Market Nationwide Reach The SPIMEX designated delivery points include all key refineries in Russia. A buyer purchases refined products on the exchange and get them delivered to the relevant railway station in Russia. Delivery terms: By rail (FOR dispatch station); By fuel trucks (ex-works); Ex-tank; Ex-pipe; By rail (ex-works). Slide 6

7 Jan Feb March 2012 Apr May 2012 June 2012 July 2012 Aug Sept Oct Nov Dec Jan Feb March 2013 Apr May 2013 June 2013 July 2013 Aug Sept Oct Nov Dec Jan Feb March 2014 Apr May 2014 June 2014 July 2014 Aug Sept Oct Nov Dec Jan Feb March 2015 Apr May 2015 June 2015 July 2015 Aug Sept Oct Nov Dec Jan Feb March 2016 Apr May 2016 June 2016 July 2016 Aug Sept Oct Nov Dec Jan Feb March 2017 Apr May 2017 June 2017 July 2017 Aug Sept.17 Oct Nov Dec Jan Feb March 2018 Apr May 2018 June Volume traded Refined products, 000 mt Market analysis, by commodity exchange (%) 100% 80% 60% 40% 20% 0% 2000 Market analysis, 000 mt Max = Slide 7 SPIMEX Saint-Petersburg Exchange MOSENEX MIMEX

8 Trade Activity Refined products Bn Thousand tones Refined products, share of implementation (mln tons) Slide 8 Diesel Arctic 0,16 2% Diesel Winter 0,62 9% Diesel Outseason 0,36 5% Fuel oil 0,71 11% Diesel Summer 1,17 17% May 2018 Jet fuel 0,68 10% Other refined products 0,05 1% Gasoline Regular-92 2,03 30% Gasoline Premium-95 1,03 15% Diesel Arctic 0,21 2% Diesel Winter 0,65 8% Diesel Outseason 0,36 4% Fuel oil 0,85 10% Diesel Summer 1,66 20% June 2018 Jet fuel 0,84 10% Other refined products 0,06 1% Gasoline Regular- 92 2,46 30% Gasoline Premium-95 1,25 15%

9 3 Natural Gas Natural Gas Market Slide 9

10 3 Natural Gas Market Trades are carried out under the rules of the exchange and the clearing house associated with it Trading is based on the following balancing points: Nadym 622,5km (Lokosovo) Parabel Contract size: 100,000 m 3 (for month ahead trading) Commodity price is set for 1,000 m 3 () including a 18% VAT Minimum price flux: 1.0 Associated clearing house of SPIMEX: Settlement Depository Company (SDCO) Gazprom Mezhregiongaz Delivery provides agency services for natural gas transportation Trading and clearing participants are accredited at SPIMEX and SDCO (the clearing house) Gazprom acts as the natural gas transportation operator In October 2015, SPIMEX launched day ahead trading in natural gas Slide 10

11 3 Volume Natural Gas Market Trades overview (October 2014 June 2018) 7000 traded (м3, mln) qr qr qr qr qr qr qr qr qr qr qr qr qr qr qr 2018 Volume traded ( mln ) Slide , Gazprom didn t participate in trades

12 4 qr qr qr qr qr qr qr qr qr qr qr qr qr qr qr October-14 November-14 December-14 January-15 February-15 March-15 April-15 May-15 June-15 July-15 August-15 September-15 October-15 November-15 December-15 January-16 February-16 March-16 April-16 May-16 June-16 July-16 August-16 September-16 October-16 November-16 December-16 January-17 February-17 March-17 April-17 May-17 June-17 July-17 August-17 September-17 October-17 November-17 December-17 January-18 February-18 March-18 April-18 May-18 June-18 3 Natural Gas Market Nadym balancing point. Trades overview (October 2014 June 2018) Price changes 39,1 bcm of natural gas sold at Nadym balancing point since launch of trading at SPIMEX (RUB 113bn) Max priсe Min priсe Market priсe Trade volumes (mln m 3 ) Volume traded (mln ) Slide , Gazprom did not participate in trades

13 4 Crude Oil Crude Oil Market Delivery by pipeline, FOB seller's facility Slide 13

14 4 SPIMEX designated delivery points and destination bases «Varandei» Varandei terminal Usa Southern Balyk Yangpur Slide 14 «Novokujbyshevskij NPZ» «Syzranskij NPZ» «Kujbyshevskij NPZ» «Saratovskij NPZ» «Rjazanskaja neftepererabatyvajushhaja kompanija» «Gazpromneft'-MNPZ» «Gazpromneft'-ONPZ» «Orsknefteorgsintez» «Marijskij NPZ» «Novoshahtinskij ZNP» «TAIF-NK» «TANEKO» «Kargopol'skij zavod nefrasov» «Evropeiskaya tradingovaya kompania» «Gazprom neft Moskovskij NPZ» «Slavneft Jaroslavnefteorgsintez» «LUKOJL - Uhtaneftepererabotka» «Zarnestservise»

15 4 13,7 Crude oil market Volume traded (bn ) 9,8 9,2 6,3 6,6 1,9 Volume Traded (mt) Slide 15

16 5 Timber Timber Spot Trading Slide 16

17 5 Timber Market Initial steps: On 11 July 2014, SPIMEX launched timber trading in its Timber and Construction Materials Market. Trading in conifer timber and processed forest products organized for deliveries originated in Irkutsk Region. SPIMEX brings together over 60 entities, including major logging companies, forest leaseholders and wood processing businesses. The exchange plans to add new trading instruments, to expand geographic reach and in the long run to launch a cross-border delivery mechanism. Volume traded, by shipment point (July 2014 May 2018) (m 3 ) ; 27% ; 6% 5 825; 3% ; 11% Storages Baerskiy forestry Balaganskiy forestry 1 500; 1% 750; 0% 6 500; 4% Bratskiy forestry Kazachinsko-Lenskiy forestry Kostinskiy forestry Nizhneudinskiy forestry Osinskiy forestry Slide ; 25% ; 23% Primorskiy forestry Cheremhovskiy forestry

18 5 Timber trading Products: Various types of timber; Sawlog; Wood slabs; Bars and planks; Deal boards; Plant bands. Perspectives: The exchange and market participants focus on broadening trading geography, raising the number of trading instruments, tools and delivery methods. Slide 18

19 6 Derivatives Market Deliverable and cash-settled futures contacts Slide 19

20 6 Futures Derivatives Market Russia s largest organized market for refined products contracts for refined products are used by the market participants both for hedging and speculation. Advantages: Market participants: leading brokers and their customers in spot commodity markets, oil companies and end users of refined products. Market makers provide permanent liquidity Acts as a price fixing tool for future purchase/sale of refined products Central counterparty services provided by Settlement Depository Company (SDCO) Contemporary risk management (portfolio margining based on SPAN methodology) Low initial margin ~7% per volume contract in index futures contracts, low commission. Slide 20 Tools for various trading and investment strategies

21 6 Slide 21 Derivatives Market Types of futures contracts Cash Settled a contract made at SPIMEX, under which the Parties undertake to pay the difference between the sale and repurchase prices of the futures contract at a certain date in the future. The underlying asset for a cash settled futures contract are SPIMEX INDICES which track changes in the domestic refined products market accurately and without delay: Index Regular-92 Index TS (RT) Index DTL Index DTZ Mazut Index The exercise price of a cash settled futures contract is determined on the basis of SPIMEX indices as of the expiration date set in compliance with the SPIMEX Rules. Deliverable a contract made at SPIMEX, under which the Parties undertake to make or take a delivery of specified quantity of the traded product at a specified location at certain date in the future. All terms and conditions of any futures contact are standard, except for the price, which is determined at the trading session depending on the current market situation. Deliverable futures contracts are executed at the SPIMEX spot market: Regular-92 (Moscow/Nizhnii Nivgorod/Perm-based) Premium-95 (Moscow/Nizhnii Nivgorodbased) DTL (Moscow/Nizhnii Nivgorod/Perm-based) DTZ (Moscow/Nizhnii Nivgorod/Perm-based) The exercise price of a deliverable futures contract is determined as its settlement price at the SPIMEX futures market as of its expiration date set in compliance with the SPIMEX Rules.

22 6 Derivatives Market Volume Traded (December June 2018) Trades in the SPIMEX Derivatives Market were launched on 17 December Volume of trades: 1852,7K contracts (64 944mln ) Year Number of Trades ,4 507, ,3 524, ,3 177, ,6 195, Slide ,5 Thousands of Contracts Мln Total

23 6 Derivatives Market Deliverable Futures FOB Urals-Primorsk On 29 November 2016, the Saint Petersburg International Mercantile Exchange (SPIMEX) started trading in physically-settled SPIMEX Urals Crude Futures (FOB, Primorsk). EXCHANGE TRADES SUPPLY MANAGEMENT RISK MANAGEMENT The contract was launched under the assignment of President of Russia Vladimir Putin, a decision of the Presidential Commission for Strategic Development of the Fuel and Energy Sector and Environmental Security and the relevant Action Slide 23 Plan adopted by the Russian Government.

24 6 Derivatives Market Deliverable Futures FOB Urals-Primorsk. Contract Details. Slide 24

25 Active Derivatives Market Deliverable Futures FOB Urals-Primorsk. Price changes. futures contracts FOB Urals-Primorsk in June 2018: U78, U88, U98 Price changes, FOB URALS-Primorsk, $ Trades volume, FOB Urals-Primorsk, $ U78 U88 U98 Slide 25

26 7 Indices A fully-fledged SPIMEX Refined Products Market and emergence of the Derivatives Market create both condition and necessity for introduction of price indices on refined products. Slide 26 Price indicators make exchange prices more representative and lay the foundation for setting reliable and transparent market pricing.

27 7 Consolidated Price Indices on Refined Products prices at large Russian refineries The average price for refined products at each of large Russian refineries. Consolidated prices are calculated for such large refineries and are used for calculating SPIMEX Regional and SPIMEX National Indices. Regional Indices The average price for refined products at 9 large demand centers (Moscow, St. Petersburg, Rostov-on-Don, Samara, Yekaterinburg, Novosibirsk, Krasnoyarsk, Irkutsk and Khabarovsk). Territorial Indices The average price for refined products at large Russian refineries located in the following territories of Russia: European Russia, the Urals & Western Siberia and Eastern Siberia & the Russian Far East. National Indices The average price for refined products at large refineries located all over Russia. Composite Index A unified indicator of the Russian domestic refined products which measures price performance of an average metric tonne of exchange-traded light refined products. Slide 27 You can find all SPIMEX Indices for refined products at spimex.com

28 7 Consolidated prices at large Russian refineries General Overview For each large refinery (more than 25 refineries on the territory of Russia) SPIMEX calculates Consolidated Prices for the following refined products: Gasoline Regular 92 Gasoline Premium 95 Summer Diesel Autumn/Spring Diesel Winter Diesel Jet Oil Fuel Oil Slide 28 Consolidated prices at large Russian refineries are used as a basis for calculations of all indices for refined products.

29 7 Regional Indices Moscow St. Petersburg Rostovon-Don Samara Yekaterinburg Novosibirsk Krasnoyarsk Irkutsk Khabarovsk Slide 29 The Regional Indices are calculated for large demand centers of Russia. The demand centers are located all over Russia. Regional Indices for each demand center are calculated on the basis of supply contracts made by refineries which actual supply (the information is based on the data on actual railroad cargo traffic) relevant types of refined products to the relevant large city (demand center). The list of refineries taken into account while calculating the Regional Indices for each demand center is compiled separately for each type of refined product. SPIMEX uses special computer filters which exclude from the input data all supply contracts with prices which materially differ from the average level of prices in the relevant demand center.

30 Regional Indices Moscow region On 01 July 2016, SPIMEX ceased calculating the Vladimir-based Indices for refined products. SPIMEX regards it expedient to use the Regional Indices for the demand center Moscow as a substitution for nowdefunct Vladimir-based Indices. The methodology used for the calculation of the SPIMEX Regional Indices has been adjusted to the current situation in the market of exchange-traded refined products and is simpler, more transparent and easier to verify than the methodology used for the calculation of the Vladimir-based Indices. All these factors make such switch from the Vladimir-based Indices to the Regional Indices well justified and well timed. Gasoline Petroleum Reginal Indices (demand center Moscow) both for exchange-traded and OTC-traded products Slide 30

31 Regional Indices Moscow region For each demand center and for each type of refined product SPIMEX relying on the information on the OTC contracts - calculates the relevant Regional Index for OTC-traded refined products. The methodologies used for the calculation of the Regional Indices for exchange-traded and OTC-traded refined products are based on the unified principles, thus providing an opportunity to compare prices for exchange-traded and OTC-traded refined products. Gasoline Regular Reginal Indices (demand center Moscow) both for exchange-traded and OTC-traded products Slide 31

32 7 Territorial Indices General Overview Territorial Indices reflect the average price for refined products offered by refineries located in European Russia; the Urals & Western Siberia and Eastern Siberia & the Russian Far East. Their distinguishing feature is the fact that they do not take into account neither adjustment ratios nor transportation rates. The average prices for exchange-traded refined products at the relevant territory are measured most precisely by indices of this class. The Territorial Indices have been calculated since 2014; They are regarded as benchmark prices by exchange trades participants and regulators; Straightforward and transparent calculation techniques; The indices are representative and verifiable. Slide 32 European Russia

33 Territorial Indices for exchange- and OTC-traded refined products as well as netbacks In addition to the territorial indices for exchange-traded refined products SPIMEX - applying analogous methodology - also calculates territorial indices for OTC-traded refined products and territorial netback indices based on the Argus Russian Netbacks. Thus, for each territory listed above and for each type of refined product we offer three sub-classes of the Territorial Indices: for exchange-traded refined products; for OTC-traded refined products and netbacks Gasoline Regular Summer Diesel Slide 33

34 7 National Indices General Overview The National Indices track average prices for each type of refined product at the national level. Each index is calculated on the basis of Consolidated Prices for the relevant product at all large Russian refineries, weighted by the share of the relevant producer in the overall domestic supply. SPIMEX National Indices Slide 34

35 7 National Indices are calculated on the basis of consolidated prices at refineries Consolidated prices at refineries are solid price indicators of each type of refined product offered by each large producer. Such prices are also used as a basis for calculation of the National Indices for refined products traded at the domestic market. The chart below shows changes in consolidated prices for Gasoline Regular 92 at all Russian refineries and the relevant National Index: Slide 35

36 7 Composite Index General Overview The Composite Index has been calculated since 2011 as a unified indicator for the domestic refined products market which measures price performance of an average metric tonne of exchange-traded light refined products Slide 36 The Composite Index is calculated in points each business day.

37 8 OTC Market Registration of OTC transactions SPIMEX Slide 37

38 8 Registration by SPIMEX of OTC transactions in commodities traded at the Exchange Acting under Russian Federal Law No. 325-FZ of 21 November 2011 and Decrees of the Russian Government No. 623 of 23 July 2013 and No. 764 of 28 July 2015, SPIMEX registers OTC transactions which result in transfer of title to the following commodities: refined products, provided that over the preceding calendar year the seller produced more than 100,000 mt thereof and the OTC contract size is equal or exceeds 60 mt; crude oil, provided that over the preceding calendar year the seller produced more than 1.0 mln mt thereof and the OTC contract size is equal or exceeds 1,000 mt; coking coal, stone coal, brown coal and anthracite, provided that over the preceding calendar year the seller produced more than 1.0 mln mt thereof and the OTC contract size is equal or exceeds 60 mt; 3rd and 4th grade wheat, provided that over the preceding calendar year the seller sold more than 10,000 mt thereof and the OTC contract size is equal or exceeds 60 mt; Natural gas sold in the domestic market at free market prices, provided that over the preceding calendar year the seller produced more than 1.0 bcm thereof and the OTC contract size is equal or exceeds 10 mcm *; LPG, provided that over the preceding calendar year the seller produced more than 100,000 mt thereof and the OTC contract size is equal or exceeds 30 mt*. Slide 38 * SPIMEX started to register OTC transactions in this commodity on 30 Jan 2016

39 8 Registration by SPIMEX of OTC transactions with commodities traded at the Exchange in Contracts Refined Products Crude Oil LPG Coal Natural Gas Grain Commodity positions Refined Crude Oil LPG Coal Natural Products Gas Grain Volume of Contracts (mln tonnes) , Slide ,70283 Refined Products 1541, , , Crude Oil LPG Coal Grain Volumes of OTC contracts with Natural Gas are 4 214,5 bcm

40 8 Registration by SPIMEX of OTC transactions with commodities traded at the Exchange in Refined Products 152 Contracts Crude Oil LPG Coal Natural Gas Refined Products Commodity positions Crude Oil LPG Coal Natural Gas Slide Volume of Contracts (mln tonnes) Refined Products Crude Oil LPG Coal Volumes of OTC contracts with Natural Gas are bcm

41 8 Number Registration by SPIMEX of OTC transactions in commodities traded at the Exchange of companies that registering OTC contracts on SPIMEX: 350 Active Companies 300 Newcomers Slide and before

42 Contact Information JSC Saint Petersburg International Mercantile Exchange Address: Moscow, Timura Frunze str., 24 Tel.: +7 (495) Web-Site: Slide 42