Dubai set to launch plastics futures in mid-Dec

05 November 2008 14:29  [Source: ICIS news]

Dubai delays plastics contracts launch to Q4DUBAI (ICIS news)--The Dubai Multi Commodities Centre (DMCC) and the Dubai Gold and Commodities Exchange (DGCX) expect to launch their Middle East and Asia plastics futures contracts in mid-December 2008, a DMCC official said on Wednesday.

"We don't expect them to remain physical - we would like the contracts to be used as financial instruments to hedge against market volatility," said James Bernard, associate director of commodities at DMCC, on the sidelines of the First Middle East Petrochemical Conference.

All the contracts would be physically deliverable on a warehouse basis, however.

The DMCC has identified six locations for its warehouses, Bernard said. They comprise Jebel Ali in Dubai, Busan and Gwang Yang in South Korea, Pasir Gudang and Tejung Pelapas in Malaysia, and Singapore.

The DMCC plans to initially trade polypropylene (PP) and linear low density polyethylene (LLDPE) in the Middle East, southeast Asia and northeast Asia.

Low density PE (LDPE) and high density PE (HDPE) would follow.

"Later we could enlarge the scope of the contracts to include other polymers, Bernard said.

The DGCX is 51% owned by DMCC. Other partners include India's Financial Technologies and the Multi Commodity Exchange of India (MCX).

The two-day conference ends on Wednesday.

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By: Prema Viswanathan
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