Energy Product Derivatives - South Korea

South Korea

The nominal value in the Energy Product Derivatives market is projected to reach US$555.00bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 6.29% resulting in a projected total amount of US$752.80bn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to US$1.19 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (US$26,910.00bn in 2024).
In the Energy Product Derivatives market, the number of contracts is expected to amount to 525.30k by 2029.

Market

Region

Region comparison

Currency

Analyst Opinion

Over the past few years, the Energy Product Derivatives market in South Korea has shown significant growth and development. Customer preferences in the South Korean market are increasingly leaning towards Energy Product Derivatives as a way to diversify investment portfolios and hedge against volatility in the energy sector.

Investors are attracted to the potential for high returns and the opportunity to speculate on price movements without owning the physical commodities. Trends in the market indicate a growing interest in renewable energy derivatives, reflecting South Korea's commitment to transitioning towards a more sustainable energy mix. This shift is driven by government initiatives to reduce carbon emissions and increase the share of renewable energy sources in the country's overall energy consumption.

Local special circumstances, such as South Korea's heavy reliance on energy imports and geopolitical tensions in the region, play a significant role in shaping the Energy Product Derivatives market. The need to secure stable energy supplies at competitive prices drives market participants to actively engage in derivative contracts to manage risks associated with price fluctuations and supply disruptions. Underlying macroeconomic factors, including global energy prices, geopolitical events, and regulatory changes, also impact the Energy Product Derivatives market in South Korea.

Fluctuations in oil prices, for example, can influence the demand for energy derivatives as market participants adjust their risk exposure based on price expectations and market dynamics. Additionally, regulatory developments related to energy markets can create opportunities for derivative trading as market participants adapt to new rules and compliance requirements.

Methodology

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.