The benzene contract will be the template for other futures products, and it is proof that CheMatch is aggressively moving ahead with our strategic vision of creating futures and options contracts for the chemical industry. Benzene is used in the production of such popular products as plastics, fabrics, pharmaceuticals, adhesives, detergents, dyes, paints and disinfectants. Trace amounts of benzene occur naturally in crude oil, and benzene can be synthesized from other petroleum-based chemicals as well as from coal or natural gas.
Most benzene is produced in conjunction with the gasoline refining process.
Because benzene prices can be volatile and because it is used in so many products, a futures contract on benzene is expected to have broad appeal within many industries. The agreement, which formalized CME s entry into the B2B arena, represents the first joint development project between a futures exchange and a B2B marketplace to create risk management products targeted to a specific industry. Leveraging CheMatch s leadership role in the Internet-based bulk commodity chemicals business and CME s global electronic trading system, the venture will create a new group of derivative products that chemical companies, traders and financial institutions can utilize to improve operational efficiencies and to implement their risk management strategies. Members and customers of CME can use the products to take a position in the chemicals market. The marketplace incorporates a real-time, interactive trading exchange where members can trade 24 hours a day, seven days a week.