As it approaches its first anniversary, the London Metal Exchange's plastics futures program is on solid ground.
The program was launched May 27, 2005, and had executed almost 23,000 polypropylene contracts and almost 14,000 linear low density polyethylene contracts by the end of April 2006. That means LME had more than 1.2 billion pounds of PP and almost 750 million pounds of LLDPE under contract.
``We didn't have any set number targets for the first year, but we're about where we expected to be,'' exchange development director Neil Banks said May 4 by phone.
Since LME's futures are global in nature, they were not affected greatly by the devastating hurricanes that crunched North American resin markets late last year. Banks said that, if anything, the hurricanes may have reduced interest from North America as more customers from that region focused on the physical deliveries they needed to stay in business.
Recently, LME officials said they were looking into extending contracts beyond the current 10-month limit, to allow the contracts to reflect more spot activity in resin markets, Banks said.
Moving forward, Banks said LME still is considering futures contracts for PVC and PET bottle resin. Changes would not come until 2007 at the earliest.