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UPDATE 1-First RIN futures trade completed on ICE
May 7, 2013 / 9:11 PM / in 4 years

UPDATE 1-First RIN futures trade completed on ICE

NEW YORK, May 7 (Reuters) - The IntercontinentalExchange
 on Tuesday saw the first trade for renewable
identification number (RIN) futures since the contracts' listing
last Monday, according to a spokeswoman. 
    The ICE's futures contracts allow buyers to hedge risk in
ethanol, biodiesel and advanced biofuel RINs in lots of 10,000
RINs for cash settlement.
    Element Markets, a Houston-based producer and marketer of
renewable energy, sold the first contract at 88 cents per RIN
for one lot of 10,000 advanced biofuel RINs, the firm's chief
executive confirmed in an email. 
    "Element Markets views the financial contract as a valuable
tool to supplement our physical business in RINs," Chief
Executive Officer Angela Schwarz said in an email. "We applaud
ICE's commitment to bring transparency and liquidity to this
fast moving market."
    ICE launched three futures contracts for RINs on April 29 in
response to increased volatility and surging prices for the
    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 per gallon in October
2012 to more than a dollar per gallon in early March. 
    The first RIN trade completed today on the ICE will settle
in December 2013. 
    Rival exchange operator CME Group is also launching
RIN futures contracts, which will become available for trading
starting May 13.

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