Energy Product Derivatives - Asia

Asia

Highlights

The nominal value in the Energy Product Derivatives market is projected to reach US$9.20tn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 1.82% resulting in a projected total amount of US$10.07tn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to US$0.01 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached United States (US$26.91tn in 2024).
In the Energy Product Derivatives market, the number of contracts is expected to amount to 842.10m by 2029.

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Energy Product Derivatives market in Asia is experiencing a significant growth trajectory driven by the region's increasing focus on energy diversification and risk management strategies.

Customer preferences: Customers in Asia are showing a growing interest in Energy Product Derivatives as a way to hedge against volatility in energy prices. With the region being a major consumer of energy, market participants are increasingly using derivatives to manage their exposure to price fluctuations. Additionally, institutional investors are attracted to the potential returns offered by these financial instruments in a dynamic market environment.

Trends in the market: In Japan, there is a noticeable trend towards the use of Energy Product Derivatives, particularly in the electricity sector. The liberalization of the country's energy market has led to increased trading activities in derivatives linked to electricity prices. Market players are utilizing these instruments to navigate the evolving landscape of renewable energy integration and nuclear power phase-out policies.

Local special circumstances: In China, the Energy Product Derivatives market is influenced by government policies aimed at promoting clean energy and reducing carbon emissions. As the country transitions towards a greener economy, there is a growing demand for derivatives linked to renewable energy sources such as wind and solar. Market participants are actively engaging in these instruments to align with China's environmental objectives and capitalize on the opportunities presented by the shift towards sustainable energy production.

Underlying macroeconomic factors: Across Asia, the Energy Product Derivatives market is also shaped by macroeconomic factors such as geopolitical tensions and global energy demand-supply dynamics. The region's reliance on energy imports, coupled with geopolitical uncertainties, underscores the importance of risk management through derivatives. Moreover, the evolving energy mix in Asia, with a gradual shift towards cleaner sources, is driving innovation in derivative products to meet the changing needs of market participants.

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.