Four months after the launch of Futures trading in polymers in India, NCDEX seems to have met with little success. The daily average volumes in PVC have been ruling around Rs 50-60 lakh (Rs 5-6 million) as against the target of Rs 100 crore (Rs 1 billion).
Till date there has been no trading in Linear Low Density Polyethylene and Polypropylene. The commodity exchange is reported to have said that the speculators have stayed away and that is the biggest handicap in discovering polymer prices.
Speculators play a critical role in price discovery, hence the commodity exchange now wants to spread awareness among investors and speculators to make sure Futures trading in polymers picks up in the near term.
Polymer Futures was launched at NCDEX on April 16. At the launch, even though polymer Futures are known to be illiquid even on the London Metal Exchange, there was optimism at the exchange. The optimism came from the NCDEX's contract design.
"We have learnt from the success of our steel contract (also otherwise known to be illiquid) that if a Futures contract is designed around the contours of physical markets and allow delivery, the contract finds acceptance and therefore liquidity," NCDEX's managing director and chief executive officer P H Ravikumar had said at that time.
In the beginning there was trading in three polymers products - polypropylene, linear low density polyethylene and polyvinyl chloride - used in consumer items spanning from tooth brushes to televisions.
