NCDEX plans 3 polymers futures

After exhibiting a strong hold on agriculture commodities futures, the National Commodity & Derivatives Exchange (NCDEX) is entering into raw material futures this week with three major polymer products including polypropylene (PP), linear low density polyethylene (LLDPE) and poly vinyl chloride (PVC).

The premier agri exchange is launching injection moulding grade of polypropylene, butene film grade (MFI-1) of LLDPE and 65-67 PVC of which the annual market size in India accounts for Rs 4100 crore, Rs 2500 crore and Rs 8000 crore respectively. These contracts would be made available for polypropylene hedgers for May, June and July.

The exchange is striving to tie up with producers of these polymer products in India to assure delivery in case the contracts are not squared off. "No MoU has been signed so far. But, efforts are on," said an exchange official. The exchange has decided to presently deliver these raw materials on ex-Bhiwandi basis,. But, in case of north-based traders, delivery would take place from Delhi warehouses.

According to the official, the circuit limit has been fixed at 6 per cent. If the prices hit this benchmark barrier, a 15-minutes cooling period would follow.

A further movement of 3 per cent in the same direction would be permitted. But, if the price hits this barrier as well, trade would be stopped for the day.

The exchange has fixed an initial margin of 2.5 per cent and exposure margin of 3 per cent. To be traded in lot sizes of 3 metric tonne each, the prices of the contracts are set to be quoted in rupees per kg with a tick size of 10 paise.