Dubai expects to launch plastics futures in Q3

06 June 2007 11:58  [Source: ICIS news]

Dubai to launch plastics futures in Q3LONDON (ICIS news)--The Dubai Gold and Commodities Exchange (DGCX) on Wednesday said it expected to launch plastics future contracts for four products in the third quarter to meet demand in the booming Middle East plastics sector.


In co-ordination with the plastics division at Dubai Multi Commodities Centre (DMCC), the exchange said it would launch futures contracts for low density polyethylene (LPDE), linear low density polyethylene (LLDPE), high density polyethylene (HDPE) and polypropylene (PP).


For each grade there would be three regional contracts - northeast Asia, southeast Asia and the Middle East – based in South Korea, Malaysia and Singapore and Dubai respectively.


“Recent market studies show that the Middle East has become the nerve centre of the global petrochemicals industry, with the Gulf Cooperation Council (GCC) emerging as the world’s largest producer and exporter of petrochemicals and plastics,” said DMCC CEO and DGCX director David Rutledge.


The proposed new contracts would be largely paper settled, but they would also allow for physical delivery at various locations.


The DMCC was confident the petrochemicals boom had created sufficient demand for the futures launch.


“We have been extremely encouraged by the response and support from the petrochemical and plastics industry as a whole and from closely associated financial establishments,” said DMCC associate director for commodities James Bernard.


“Since announcing its intentions in January to add plastics to its commodities portfolio, DMCC has received enormous interest from the industry and has made great progress in a short period of time,” he added.


The London Metal Exchange (LME) launched futures contracts for PP and LLDPE in May 2005. Later this month, the LME plans to launch separate contracts for Europe, North America and Asia respectively.


Bernard said the DGCX would not be in competition with the regional LME contracts as it was concentrating on the Middle East and offered additional products.

By: Mark Watts
+44 20 8652 3214

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