Tradition Green is pleased to confirm the first COB trade of Wood Pellets on the Euronext exchange. The trade, for 10 lots Dec 17 delivery, equivalent to 250 tonnes, was arranged by Tradition on Euronext. This is a significant milestone in the creation of a commoditized market for biomass.
Developed in close co-operation with the biomass community, the Euronext Wood Pellets futures contract has been designed to meet the needs of market professionals looking for portfolio diversification and price hedging tools against fluctuations in the prices of pellets or closely-related products. These fluctuations are mainly caused by changes in economic supply and demand, availability of raw materials and winter weather seasonality patterns.
“Tradition is always keen to be at the forefront of development in new environmental markets. We have a proud history of being ahead of the curve in environmental products, and we’re committed to helping build a robust and dynamic biomass market with innovative energy products such as the Euronext wood pellet contract.” said Lucy Mortimer, Business Development for Tradition Green.
The contract has been developed to give both producers, traders and end users an opportunity to hedge their exposure to price fluctuations, and provide a clear pricing signal for this fast growing commodity. Until now, all transactions have been executed OTC for physical delivery, and producers or end users have been unable to hedge their exposure in the pellets market.
The Euronext Wood Pellet contract may also be used as a proxy hedge for wood chip producers and users.
"We are very pleased to welcome the first trade executed in the Euronext Central Order Book on our residential wood pellets contract thanks to the support of Tradition, a key player in biomass brokerage and a Euronext Trading Member. This is an important step that confirms the interest in this hedging tool developed with the industry and market participants. We will now concentrate on assisting our members create a momentum and see our contract gain traction. " said Vincent Roiron, Project Manager Commodities Energy & Metals, Euronext.
Tradition Green is able to execute trades on Euronext* on behalf of our clients, and to offer clients access to prices posted on the exchange. Tradition can also arrange trades to be “given up” to the client’s Clearing Broker for clearing, providing maximum security behind a transaction.
To talk to us about trading wood pellets on Euronext, and to get documentation in place, please contact biomass@traditiongreen.com or +44 207 1981 5837