About the ExchangeChemConnect Offers Renewable
Energy Trading with New OTC Physical Ethanol Platform
Addition to the ChemConnect Commodities Exchange will help companies efficiently buy and sell important gasoline additive; enhanced price visibility also expected to support growth of futures trading and improve risk management opportunities
HOUSTON, TX (June 27, 2006) - ChemConnect, Inc., the leading electronic exchange for trading midstream energy, chemicals, plastics and related products, today announced the addition of ethanol to its Commodity Exchange platform. The ChemConnect Commodity Exchange is widely recognized as the leading platform for price discovery and physical transaction execution for other gasoline blendstocks and octane components such as toluene, xylene, butanes and natural gasoline. The addition of ethanol to the exchange will provide buyers and sellers a more efficient method for marketing and trading this increasingly important additive.
Ethanol is a globally growing alternative and renewable fuel with projected capacity expected to almost triple in the United States over the next 5 years. U.S. production capacity has already exceeded the 4 billion gallon goal for 2006 set by the 2005 Federal energy bill. Over 30 new ethanol plants are projected to be available through 2007, with demand growth accelerated by the phase-out of MTBE in the US gasoline pool.
ChemConnect will initially add the capability to transact with counter-parties on a bilateral basis at the primary ethanol trading hubs of Argo, Illinois, New York Harbor, Albany, Dallas/Ft. Worth, Houston, Phoenix and Los Angeles/Long Beach.
"The ethanol industry is in a dramatic growth phase and is desperately in need of price discovery and an efficient transaction medium to help provide real-time visibility into the supply/demand balance," said Eric T. Paulsen, vice president of commodity markets, ChemConnect. "We believe an expanded and robust physical liquidity pool at some of the primary trading hubs should help create an orderly transition to an efficient market."
Current gasoline market conditions have been hampered by elimination of MTBE and aggravated ethanol transportation and distribution issues due to the very sharp growth of ethanol use.
"The addition of a transparent and liquid market transaction platform across a range of consuming regions should also support the growth of the CBOT ethanol futures contract," said Jeff DeReamer, CEO of EthanolMarket.com. "Enhanced price visibility for an array of geographic locations helps define basis price risk and will improve risk management opportunities for many in the industry."
About ChemConnect
ChemConnect is a leader in helping customers optimize their purchasing and sales processes for chemicals, plastics, and related products through a unique combination of market information, industry expertise, e-commerce solutions, and an active network of trading partners. More than 7,500 Member companies in multiple industries around the world can use ChemConnect's highly efficient tools and services to streamline transactions and lower costs. Visit www.chemconnect.com for more information.
Note to Editors: ChemConnect is a registered trademark of ChemConnect, Inc. All other product, trademark, company or service names mentioned herein are the property of their respective owners.