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Shanghai Chlor-Alkali to Run PVC Futures Hedging Business

Posted on: Fri, 15 May 2009 08:39:00 EDT

Symbols: SLLBY

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SHANGHAI, May 15, 2009 (SinoCast Daily Business Beat via COMTEX) --
SLLBY | Quote | Chart | News | PowerRating -- Leading chlorine and alkali producer Shanghai Chlor-Alkali Chemical Co., Ltd. (SHSE: 600618) plans to start the polyvinyl chloride (PVC) hedging business.

The business will not surpass 70% of its spot PVC, said its latest announcement. Its general manager will be entitled to take charge of the business, and in the initial operation, the Shanghai-listed company will engage one or two futures companies as its brokers.

With the new business as its anti-risk tool, Shanghai Chlor-Alkali will raise its ability to fight against market risks and deal with the periodical price fluctuation.

PVC producers will not only compete with each other in the spot market but also in the PVC futures market. In fact, they have suffered a lot when the PVC prices have kept falling but the prices of calcium carbide, a major raw material, have remained strong.

In mid-October 2008, 24 ones out of the country's 65 large PVC makers had cut their production by over 50%, according to a survey made by Ccaon.com.

Source: www.shihua.com.cn (May 15, 2009)

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