19 November 2013 07:30 [Source: ICIS news]
DUBAI (ICIS)--Dubai Gold and Commodities Exchange (DGCX) said on Tuesday it will launch its polypropylene (PP) futures contract on 28 February 2014, marking the first ever plastics contract to be listed in the Middle East and North African (MENA) region.
The new DGCX PP futures contracts will create a transparent market and new pricing benchmark for the MENA region, it said in a statement on the sidelines of the 8th annual Gulf Petrochemicals and Chemicals (GPCA) Forum in Dubai.
The contract is sized at 5 tonnes, with the contract price quoted in US dollars per tonne, the statement added.
“The price of plastics fluctuates, as does the price of other commodities, but currently market participants in the region do not have the ability to hedge against price fluctuations via a futures contract, said Gary Anderson, CEO of DGCX.
We believe this is the opportune time to launch our plastic futures contract in the region, allowing market participants in the plastics supply chain, including producers, traders, convertors and end-users to hedge their polymer price risk,” he added.
The Gulf Cooperation Council (GCC) produces more than 20% of the world’s plastics and the global production of PP exceeds 65m tonnes annually, according to the statement.
“Our plastics contract will be a key contract for DGCX as the Exchange seeks to support its members and clients and tap into the growing trade corridors to the Far East – one of the largest consuming regions of plastics,” Anderson said.
DGCX has been working closely with the Dalian Commodities Exchange (DCE) in China since 2012 when both parties signed a memorandum of understanding (MoU) to develop a plastics futures contract.
DCE also aims to launch its first PP contract in 2014, the statement said.
The GPCA 2013 Forum is being held in Dubai on 19-21 November.
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