* First trade was for 50,000 ethanol RINs
* Trade cleared at 80 cents per RIN
* Trade brokered by StarFuels Inc
NEW YORK, May 17 The CME Group's
newly-launched renewable identification number (RIN) futures
contracts saw their first trade on Wednesday, according to a
spokesman for the exchange operator.
The futures contract allows buyers to hedge their risk in
the government-mandated renewable fuel credits in lots of 50,000
on the CME's New York Mercantile Exchange. The CME listed nine
contracts across three types of RINs - ethanol, biodiesel and
advanced biofuel - on Monday.
The first trade occurred for a 50,000 lot of ethanol RINs,
the spokesman said. StarFuels Inc, a Jupiter, Florida-based
brokerage, negotiated the first trade at 80 cents per RIN,
according to a broker at the firm.
The CME's launch of RIN futures trading follows a similar
move by rival IntercontinentalExchange, which launched a
suite of RIN futures contracts on April 29. The ICE saw its
first trade on May 7 for one lot of 10,000 advanced biofuel RINs
at 88 cents each.
Both exchanges launched the futures contracts in response to
increased volatility and surging prices RINs earlier this year.
Federal law requires refiners and importers to show the
credits as proof of compliance with rules requiring the blending
of renewable fuels such as ethanol and biodiesel into U.S.
gasoline and diesel stocks. If refiners or importers don't blend
enough ethanol, for instance, they must make up the difference
by buying ethanol RIN credits.
Ethanol RINs surged from about 5 cents in October 2012 to
more than a dollar each in early March. They were seen trading
today at 84 cents each, a trader said.