DMCC to add plastics to commodities portfolio

30-Jan-07

The Dubai Multi Commodities Centre (DMCC) plans to expand its existing commodity portfolio with plastics because of the considerable potential for industrialisation in this sector. This is in line with the significant growth in the plastic products market in Dubai, which is now considered to be one of the largest markets in the region. Although the specifics of the futures contracts are yet to be finalised, High Density Polyethylene, Low Density Polyethylene, Linear Low Density Polyethylene, and Polyethylene Terephthalate could be included. Recent market studies show that the Middle East has become the nerve centre of the global petrochemical industry, with the GCC emerging as the largest producer and exporter of petrochemicals and plastics. 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. The petrochemical and polymer industry in the UAE is ranked second among the GCC states with Saudi Arabia leading the list. In fact, the UAE has attracted more than AED15 billion in investments in 2005, representing almost 22% of the total manufacturing investments in the UAE. The UAE is also one of the top five trading partners for Indian plastic products. According to a recent report by the Dubai Chamber of Commerce and Industry, the 119 establishments in Dubai that manufacture plastic and rubber products had a total turnover of AED1.3 billion by the end of the first quarter of 2006. The DMCC has commenced exploratory studies ahead of plans to launch plastics futures contracts on the Dubai Gold and Commodities Exchange (DGCX) in the coming months. Currently, it is in the process of constituting an advisory committee, which will focus on the details of several Middle East/North Africa/Asia regional plastics contracts. In addition, DMCC is also in the process of becoming a member of the Gulf Petrochemical and Chemicals Association.