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

2014 leaves some resin firms in the black while others struggle

January 23, 2015 2:37 pm ET

On the financial side, 2014 was good for Hexcel Corp., so-so for Celanese Corp. and it could have been better for Omnova Solutions.    More

Image

Clariant's ColorForward predicts future consumer trends

January 23, 2015 1:33 pm ET

Clariant International Ltd. is marking a decade of color forecasting with the 10th edition of its ColorForward program.    More

Image

The future for PolyOne is colorful

January 23, 2015 1:28 pm ET

PolyOne Corp. is writing four color stories for 2016.    More

Image

Mexico's Polymer Solutions looks to grow, expand offerings with name change

January 23, 2015 12:03 pm ET

British biodegradable additives developer Symphony Environmental Technologies plc's Mexico distributor has changed its name from Plásticos...    More

Image

Drop in oil leads to resin pricing plunge

January 22, 2015 3:16 pm ET

In most Decembers, resin makers try to focus on the holidays and on spending time with their families. This improves their mental well-being and also ...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

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

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events