Published On: Sat, Jan 25th, 2014

CSRC Approves DCE Launching PP Futures Trading

Liu Xingqiang DCE President

Liu Xingqiang DCE President

Recently, the trading of the polypropylene (PP) futures on Dalian Commodity Exchange (DCE) has been approved by China Securities Regulatory Commission (CSRC). The specific listing time of the contracts will be determined by DCE based on the progress of the preparations.

PP is the main raw material in producing plastic products, involving a long industrial chain and widely used in automobiles, appliances, building materials and other industries. China is the world’s largest PP producer and consumer. In 2012, China’s PP production reached 11.09 million tons with an apparent consumption of 14.86 million tons, accounting for about 19% and 26 % of the world total respectively, and the market size exceeded RMB 160 billion. In recent years, the PP price has seen frequent and significant fluctuations, with the price volatility reaching 33%, 29% and 18% respectively from 2010 to 2012, hence the strong demand of spot enterprises for hedging. The introduction of the PP futures trading and the improvement of the price formation mechanism will provide the relevant enterprises with a hedging instrument, enrich the series of the chemical futures products and enhance the healthy development of the industry. At present, China has listed the purified terephthalic acid, polyethylene, PVC and other products, having basically formed the system of the chemical futures products.

Polypropylene Futures Contract (Draft)

Traded Product Polypropylene
Trading Unit 5 tons / contract
Price Unit yuan (RMB) / ton
Minimum Price Change RMB 1 / ton
Price Limit 4% of the settlement price of the previous trading day
Contract Months January, February, March, April, May, June, July, August, September, October, November, December
Trading Time 9:00-11:30 am, 13:30-15:00 pm, Monday to Friday
Last Trading Day the 10th trading day of the contract month
Last Delivery Day the third trading day after the last trading day
Delivery Grades Polypropylene Delivery Quality Standard of Dalian Commodity Exchange
Delivery Sites designated polypropylene delivery warehouses of Dalian Commodity Exchange
Minimum Trade Margin 5% of the contract value
Delivery Mode physical delivery
Trading Code PP
Listing Exchange Dalian Commodity Exchange

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