China Approves Propylene and Benzene Futures and Options Ensuring Stability in Key Markets

On July 4, the China Securities Regulatory Commission (CSRC) announced its approval for the registration of propylene futures and options on the Zhengzhou Commodity Exchange. The CSRC emphasized its commitment to ensuring the smooth introduction and stable operation of these financial instruments, urging the exchange to make necessary preparations.

Propylene, a highly flammable and reactive gas, is a core raw material in the petrochemical industry. While it is traditionally produced through steam cracking and catalytic cracking, newer technologies like Methanol-to-Propylene (MTP) and Propane Dehydrogenation (PDH) are gaining traction. Over 60% of propylene is used to produce polypropylene, which finds applications in packaging, automotive, and home appliances. Propylene derivatives like acrylonitrile and propylene oxide are also crucial for industries such as plastics, textiles, and chemicals.

Separately, on June 20, the CSRC approved the registration of benzene futures and options on the Dalian Commodity Exchange. Benzene serves as a critical organic chemical feedstock, linking petroleum and coal to downstream industries such as synthetic resin, fiber, and rubber, which are essential for appliances, textiles, automotive, and construction sectors.

China, the world's largest benzene producer and consumer, produced 25.13 million tons of benzene in 2024, accounting for 39% of global production. Consumption reached 29.26 million tons, or 43% of global demand, with imports of 4.31 million tons and a 15% foreign dependency rate. The volatile benzene market, influenced by factors like crude oil prices and global trade shifts, has seen significant price swings, with prices plunging 31% this year, from 7,780 RMB/ton to 5,375 RMB/ton. This volatility underscores the growing demand for risk management tools in the market.