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

Experts explain why resin sales are down in a healthy US economy

February 27, 2015 1:58 pm ET

The economies of the U.S. and Canada posted solid growth in 2014 — even though resin demand in those countries lagged behind.    More

Image

Industry vet Dwight Morgan joins M. Holland

February 27, 2015 1:55 pm ET

Resin distribution leader M. Holland Co. has hired industry veteran Dwight Morgan as its vice president of corporate development.    More

Image

Indian masterbatch makers growing locally and thinking globally

February 27, 2015 1:30 pm ET

GANDHINAGAR, INDIA — India’s masterbatch makers are expanding their domestic capacity to meet growing demand, as some are also moving...    More

Image

Polypropylene prices rise, while PE and PS fall

February 26, 2015 4:01 pm ET

North American prices for polyethylene and polystyrene resins continued to fall in February, while regional prices for polypropylene showed a...    More

Image

Price and sustainability both key to success for carpet recycler

February 26, 2015 1:28 pm ET

DALLAS — A green message will get you in the door, but ultimately that sustainability message has to be backed up with quality at the right pric...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

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

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

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

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

More Events