Sitting at the heart of one of the world’s most exciting infrastructure developments, Dubai’s base metal market is not only ideally located for regional consumption, but furthermore a bridge between the core supply markets of sub-saharan Africa, Australia and the Black Sea, to the buyont consumer economies of India and China. With considerable global demand from galvanising through to electrical wiring, the base metal market represents a fundamental component of today’s emerging economies, currently valued in the region at US$170bn each year. Ongoing regional developments in refining and construction also continue to deliver remarkable growth in base metals, and the region is fast emerging as a global centre for aluminium production, accounting for some two thirds of all aluminium production investment.
DMCC Tradeflow delivers flexibility and trade finance for metal traders. Starting in 2012, the DMCC Tradeflow platform has been providing our members with a holistic approach to certifying commodities for collateralisation purposes. Warehoused commodity inventory is often viewed as an unproductive resource that costs money in storage and insurance. Tradeflow can turn these idle resources into assets by registering goods in the form of negotiable electronic warrants issued by the warehouse operator. By providing documents of title for commodities in the form of warehouse receipts, we enable members to both transfer the ownership of assets to another party without the movement of the goods, and to use goods as underlying collateral in order to secure favourable financing for their future operations. The platform further enables the use of commodities as security between Islamic banking institutions, as in the case of the DMCC Tradeflow Shariah-compliant ‘Murabaha’ scheme.
Since April 2012, the Dubai Gold and Commodities Exchange (DGCX) has been trading of very successful Copper Futures contract. Copper is the third most widely used metal in the world and is listed on a number of major international exchanges. The contract listed on DGCX was the first Copper Futures contract to be introduced in the Middle East. The 5 metric tonne (MT) cash-settled contract provides the optimal tool to hedge and mitigate price risk in physical copper and provides investors with access to one of the most liquid metal contracts in the world. The 5 MT contract size was a result of feedback from the physical hedgers, investors, and cross-exchange participants. For more information, see the DGCX contract specifications.
Dubai Aluminium and Emirates Aluminium are already racing up the ranks of global producers, producing about 1.75 million tonnes of the metal annually, buoyed by the ongoing demands of construction sectors in the UAE, Saudi Arabia, Qatar and across the Gulf. Together with the world-class bulk transport port terminals across the UAE, the consistency of high levels of both the supply and demand of aluminium guarantees a stable trading market with high volumes and ample opportunities.