This month, the Chicago Mercantile Exchange (CME) group announced it would set up energy derivatives based on the Japan LNG assessment published by RIM Intelligence, a Japanese price reporting agency.
It plans to begin development and clearing of a Japanese LNG contract later this year, which it hopes will provide a vehicle for hedging price risk in the world’s largest LNG importer. Japan has for decades relied on oil-indexed imports tied to the Japan Customs Cleared (JCC) price. The country is liberalising its gas and power markets, meaning power utilities and city-gas suppliers will be more vulnerable to market volatility.
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