MCX unveils plastic futures in India

20-Aug-05

With Indian polymer markets poised to triple by 2010-11, plastic futures in India will benefit the market partaker with price risk management and better price discovery. Introducing futures in this widely used commodity will enable traders to hedge their risks and benefit from the price discovery on the exchange platform. The Multi Commodity Exchange of India (MCX) unveiled plastic futures for the first time in Asia Pacific. MCX will initially offer contracts for September and October in polypropylene(PP) and high density polyethylene (HDPE). The modus operandi: Trading unit for the contracts will be 2 MT Quotations will be ex-Bhiwandi, exclusive of sales tax/VAT and octroi, per kg Tick size of contract is 10 paise with a daily price limit of 2% Trading in a contract month will open on the 21st and would run for 3 months. Each contract would expire on the 20th of the contract month. There would be initial margin of 3% Delivery will be in lots of 10 MT at exchange-approved warehouse at Bhiwandi The PP and HDPE contracts are aimed at attracting the domestic polymer industry to cap their input cost and to price their end products for consumers. The contracts will provide a reliable, transparent and efficient price risk management tool.