The Aviation Turbine Fuel (ATF) futures contract launched on Tuesday by Multi Commodity Exchange (MCX) saw hectic activities on the very first day with airlines and oil companies actively participating in the trading.
According to traders, the ATF trading volumes reached Rs 34.80 crore on the first day. The futures contract of more than 42,000 barrels was firmed up on Monday. MCX is only the second commodity exchange in the world to launch ATF futures after the Tokyo Commodity Exchange. ATF contracts for July, August, September, October, November and December are being offered in the MCX platform.
The trading unit for ATF contract is 100 barrels, with the maximum order size is fixed at 10,000 barrels. The prices of ATF saw a high of Rs 7,800 per barrel, which eventually closed Rs 7,655 per barrel. ?With the launch of ATF futures on MCX, aviation companies can hedge their ATF requirement plus refiners can hedge their refinery margins by crack spread,? a MCX official said. Under the ATF futures contract, the delivery centre is in Mumbai and the contract has both, sellers? and buyers? option.
Bharat Petroleum Corporation, Hindustan Petroleum Corporation, Indian Oil Corporation, National Aviation Company of India, Go Airlines and Jet Airways have already evinced interest in hedging on the MCX platform.
India?s consumption of ATF has increased by almost 77% in 2007-8 compared with 2000-01. ATF accounts for around 40% of an airline?s input costs.