The Dubai Commodities Clearing Corporation (DCCC), the central counter-party (CCP) service provider, wholly owned by the Dubai Gold and Commodities Exchange (DGCX), has successfully completed its first physical delivery against the region’s first plastics futures contract.
DCCC facilitated the delivery of 200 tonnes of polypropylene (Raffia grade). Physical delivery of the plastics contract was made at the Approved Warehouses of Steinweg Sharaf FZCO. EARNEX DMCC was the executing broker for the plastics delivered. The delivery was facilitated through DMCC’s Tradeflow system. DCCC, which acts as the clearing house for DGCX, is the central counterparty for each trade carried out on the Exchange.
Gaurang Desai, Chief Operating Officer of DCCC, said, “The successful completion of the first physical delivery demonstrates the close convergence between the DGCX plastics futures market and the larger physical market, which allows the contract to be used as an effective hedging tool by a wide range of market participants. This also vindicates the investments DCCC have made in establishing a world-class physical settlement infrastructure.”
This new Polypropylene (PP) futures contract, which began trading in February 2014, is sized at 5 metric tons (MT), with the contract price quoted in US dollars per MT. The PP is of general purpose raffia grade with a melt flow rate ranging from 2.5 to 4, and is available for trading on the DGCX Platform via all DGCX brokers. Delivery locations for the product include approved warehouses in Dubai free zones, Dubai World Central (DWC) and Jebel Ali Free Zone (JAFZA). Each monthly contract expires on the tenth trading day of the contract month.
The DGCX plastics futures contract was designed to create a transparent market and new pricing benchmark for plastics in the region. The contract provides a risk management tool for all participants in the plastics supply chain, including producers, traders, convertors and end-users. The contract was launched concurrently with the plastics contract of the Dalian Commodity Exchange (DCE) in February 2014 as part of a joint effort to raise global liquidity in the trading of the product.
Meanwhile, DCCC also completed the physical delivery of 5 million Japanese Yen for JPY-USD futures contracts. The executing broker for the physical delivery was Philip Futures.
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