Derivatives markets

Of these producers, Atochem, Degussa, and Daicel are reported to be in the merchant acrolein business. Union Carbide suppHes only the acrolein derivative markets. Rhc ne-Poulenc also produces acrolein, primarily as a nonisolated intermediate to make methionine. A number of other small scale plants are located worldwide which also produce acrolein as an intermediate to make methionine. 

Economic Aspects. Isophorone was available at 1.87/kg ia October 1994. The sole domestic producer of isophorone is Union Carbide however, Hbls is by far the largest isophorone producer ia the world. Other significant producers are Hsted ia Table 9. Despite the erosion of some of the historical solvent uses of isophorone, the expanding derivatives market for this product appear to sustain its production ia the short term. 

About 69% of the total 1988 U.S. consumption of isobutyraldehyde, went into the production of isobutyl alcohol and isobutyraldehyde condensation and esterification products. The other principal isobutyraldehyde derivative markets (as a percentage of total 1988 U.S. isobutyraldehyde consumption) are neopentyl glycol (15%) isobutyl acetate (6%) isobutyric acid (5%) isobutyUdene diurea (2.5%) and methyl isoamyl ketone (1.7%). 

Tazobactam (Tig. 5.6F) is a penicillanic acid sulphone derivative marketed as a combination with piperacillin. Alone it has poor intrinsic antibacterial activity but is comparable to clavulanic acid in inhibiting /J-lactamase activity. 

Christopher M, Gattoma J (2005) Supply chain cost management and value-based pricing. Industrial Marketing Management 34 (2) 115-121 Clark E, Lesourd J, Thieblemont R (2001) International commodity trading physical and derivative markets, John Wiley Sons, Chichester Commodity Research Bureau (2005) The CRB Commodity Yearbook 2005, John Wiley Sons, Chichester... 

Liebner, W. (2005) Gas to propylene, GTP/MTP technology. Presented at Propylene Trade Derivatives Markets, Singapore, October 24-25. 

H-Propanol and ri-propyl acetate account for about 70% of the U.S. propionaldehyde derivative market. These compounds are used principally in flexographic and gravure inks which require volatile solvents to prevent smearing and ink accumulation on the printing presses. Some propanol is also converted into n-propylamines which aie important pesticide intermediates. -Propanol is also employed as a precursor for glycol ethers. 

Vol. 543 C. Benkert, Default Risk in Bond and Credit Derivatives Markets. IX, 135 pages. 2004. 

Hydrochloric Acid Chlorine Derivatives Market Analysis Services... 

Each market has its local marker crude to which other crude oils are referenced - West Texas Intermediate (WTI), Brent Blend and Tapis Blend respectively. There is extensive trade between the regions (arbitrage) which links the global oil and oil derivatives market into one structure and evens out regional price differentials. 

Commodity Quality variation Cyclicality Seasonality Derivative markets exist Distinctive features... 

The repo market in linkers coexists alongside an old-style stocklending system. Issues seldom stray far from general collateral rates. Index-linked gilts are not strippable, and there is no index-linked futures contract. There is a sterling inflation derivatives market, which... 

The UK market in inflation-linked swaps has existed since the early 1990s. In the last five years, there has been a steady growth in volume and lengthening of maturities. The recent developments in the Eurozone inflation derivatives market show that we can very quickly move from a nonexistent market to a multi-billion Euro market in a matter of a few months. 

Impacts on the credit derivative market Introduction of a new type of risk counterparty in the credit derivatives market that has the capacity to sell protection on large portfolios of risk, increasing the capacity... 

EXHIBIT 17.14 Growth of OTC versus Exchange-Traded Interest Rate Derivatives Markets... 

Unfortunately, without a central clearing house to monitor and record all transactions, it is difficult to obtain reliable statistics for the OTC interest rate options market. However, the BIS conducts regular surveys of the markets and publishes a breakdown of notional amounts outstanding by currency (but not by country) of all interest rate derivatives (including swaps, ERAs, futures, as well as options) across all markets (OTC as well as exchange-traded). A summary of this is shown in Exhibit 17.16, from which it can be seen that the size of the euro-denominated market now virtually matches that of the US dollar, signalling the increasing importance of the European interest rate derivatives market. 

Credit Derivatives are a relatively recent addition to the range of financial instruments used by banks and financial institutions. However, there has been strong growth in this innovative area of the capital markets. The British Bankers Association (BBA) estimates that at the end of 2001 the global market (excluding asset swaps) accounted for over 1 trillion. The projected growth rate for the global credit derivatives market is predicted to reach a 4.8 trillion by 2004. 

Credit derivative transactions involve both a protection buyer and protection seller. Banks currently act as either buyers or sellers of credit protection in a transaction. Insurance companies are also active in the credit derivatives market as sellers of credit protection. 

The market for single-name credit default swaps has rapidly developed in volume over the past few years and represents the highest proportion of the global credit derivatives market by notional value. The credit default swap is linked to the reference entity and its obligations. 

Within the credit derivative market, a common tenor for transactions is the 5-year maturity. Credit default swaps have most liquidity at the 3-year and 5-year maturity/tenor. As a result, we often see that 5-year credit default swaps are used in structured credit transactions, such as collateralised synthetic obligations (CSOs) for this reason. Credit derivatives with a long maturity (over five years or with a short maturity (under one year) are less common. 

An interesting development in the credit default swap market is the response of protection sellers to credit events, the impact is ultimately reflected in the price of credit default swaps, as reflected by the credit default swap spread. Credit derivative markets have experienced spread widening at times of bad credit related news, in effect this reflects the protection sellers pricing the risk of the additional probability of a credit event into the protection they sell. 

Asset swaps are used to alter the cash flow profile of a bond. The asset swap market is an important segment of the credit derivatives market since it explicitly sets out the price of credit as a spread over LIBOR. Pricing a bond by reference to LIBOR is commonly used and the spread over LIBOR is a measure of credit risk in the cash flow of the underlying... 

Credit default swap positions may be compared to bond positions when examining relative value of between the cash markets and the derivative markets. It is most common to compare the CDS with the bond on one of the following bases ... 

This section examines a few commercially available software packages and analytic tools designed to mitigate risk in the increasingly innovative credit derivative market. It reviews CDS data providers, examines analytic programs designed to provide expected default probabilities and theoretical prices, and highlights applications intended to simplify CDO investments. ... 

We will now turn our attention to sophisticated risk management tools. These tools are critical for companies involved in the credit derivative market. The following products are designed to produce default probabilities, the fundamental building block for effective risk management. 

This discussion covers the main factors affecting bond returns in the European fixed income market, namely, the random fluctuations of interest rates and bond yield spreads, the risk of an obligor defaulting on its debt, or issuer-specific risk, and currency risk. There are also other, more subtle sources of risk. Some bonds such as mortgage-backed and asset-backed securities are exposed to prepayment risk, but such instruments still represent a small fraction of the total outstanding European debt. Bonds with embedded options are exposed to volatility risk. However, it is not apparent that this risk is significant outside derivatives markets. 

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