30 January 2007 – The Dubai Multi Commodities Centre (DMCC) is planning to launch plastics futures trading to capitalise on growth in the Gulf region’s polymer sector.
The futures contracts would be regional, covering Middle East, North Africa and Asia. Details have still to be finalised, but DMCC said it is looking to include HDPE, LDPE, LLDPE and PET.
James Bernard, newly appointed as DMCC associate director of commodities, said: “We have been carrying out exploratory studies for some time now, and have identified considerable demand for an efficient and transparent pricing system specific to the plastics and petrochemical sector. When launched, the plastic futures contracts will provide a tool to hedge price risk for producers, traders, distributors, converters and other plastics consumers.”
An advisory committee is being formed to work on the details of the contracts, which would be launched on the Dubai Gold and Commodities Exchange “in the coming months”, said DMCC. It is intended the contracts will be mostly settled financially, but there will be scope to allow for physical delivery at various locations.
Dubai, Saudi Arabia and other countries in the Gulf have been rapidly developing polymer production as an offshoot of their petrochemicals industries. This growth is expected to widen further.
DMCC chief executive, David Rutledge, said: “With huge volumes coming on line over the next four to five years, and the region becoming the focus of international polymer producers and converters, there is immense growth potential for the regional downstream plastic industry.”
