Exchanges launch futures contracts for polypropylene

Rebecca Kanthor
PLASTICS NEWS CHINA

Published: February 28, 2014 2:38 pm ET

Related to this story

Topics Materials, Materials Suppliers

Two commodities exchanges separated by 3,000 miles but linked by the trade in plastics have simultaneously launched polypropylene future contracts.

After signing a memorandum of understanding in 2012 the Dubai Gold and Commodities Exchange (DGCX) and Dalian Commodity Exhange (DCE) launched their contracts on Feb. 28.

The Gulf region produces more than 50 million tons of plastics a year, and a significant percentage is exported to China, the largest consumer of plastics in the world, said Gary Anderson, CEO of DGCX.

"We believe our plastics futures contract will be a key risk management tool for all participants in the plastics supply chain, including producers, traders, convertors and end-users," Anderson said.

The simultaneous launch was a strategic move by the DGCX and the DCE to control risk. "We have timed our contract launch with that of DCE in order to maximize liquidity and provide trading opportunities between the two contracts," Anderson said.

Li Zhengqiang, CEO of DCE, added: "Though China is the largest importer of polypropylene, participants in the market have been exposed to significant price risk for several decades," he said. "We have been working with DGCX to structure a similar plastics contract that helps the plastics industry to hedge their exposure effectively."

The Dubai exchange's PP futures contract is sized at 5 metric tons and quoted in U.S. dollars per metric ton. Warehouses will be located in Jebel Ali and Dubai World Central and the exchange promises that physical delivery will limit price variance between futures and physical markets.


Comments

Exchanges launch futures contracts for polypropylene

Rebecca Kanthor
PLASTICS NEWS CHINA

Published: February 28, 2014 2:38 pm ET

Post Your Comments


Back to story


More stories

Image

EPA fines RI polymer company

August 29, 2014 1:20 pm ET

A Rhode Island polymer manufacturer has reached a $60,000 settlement with the U.S. Environmental Protection Agency (EPA) for violating federal clean...    More

Image

Chinese compounders seek market shares, often at the expense of margins

August 29, 2014 10:02 am ET

China's largest compounder, Kingfa Sci. & Tech. Co. Ltd., as well as its more automotive-focused counterparts Shanghai Pret Composites Co. Ltd. and...    More

Image

PP prices rise 5 cents

August 28, 2014 3:59 pm ET

After a one-month break, volatility has returned to the North American polypropylene resin market, with prices increasing by an average of 5 cents...    More

Image

DuPont fined for 2010 chemicals release

August 28, 2014 1:37 pm ET

DuPont Co. has been fined almost $1.3 million for the release of several chemicals — including plastics feedstock phosgene — at its plant ...    More

Image

LyondellBasell to build feedstock plant on Gulf Coast

August 28, 2014 11:05 am ET

LyondellBasell Industries will build a world scale propylene oxide plant on the U.S. Gulf Coast with a capacity of 900,000 metric tons per year.    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events