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Chinese exchange to launch PP resin futures

By: Isaac Li
PLASTICS NEWS CHINA

June 6, 2013

NINGBO, CHINA — Dalian Commodity Exchange, which claims to be the world's largest plastics futures market by trading volume, plans to launch polypropylene futures before the end of this year.

The PP futures project has been filed with China's Securities Regulatory Commission, and is expected to be listed this year, DCE general manager Li Zhengqiang told the audience at the June 5 China Plastics Industry Conference in Ningbo, Zhejiang province.

DCE's LLDPE futures and PVC futures, respectively launched in July 2007 and May 2009, have been running smoothly with active tradings, Li said.

The LLDPE and PVC futures prices have been increasingly representative of spot prices, he added. The correlation coefficient between futures and spot prices has stayed above 0.9 for LLDPE since the launch, and the number averages around 0.8 for PVC futures.

In 2012, DCE recorded 21.55 percent of price volatility for LLDPE futures and 11.45 percent for PVC futures, he said, close to the pricing fluctuation in spot markets in China.