The London Metal Exchange might expand its futures program by the end of the year to include an additional grade of linear low density polyethylene.
The change would meet buyers' interest, said plastics business manager Robert Sheldon in a recent interview in Houston. The LME now offers futures contracts on a single grade of LLDPE and three grades of polypropylene.
LME has offered the contracts since 2006. Sheldon said liquidity in plastics futures contracts is “low, but growing.”
“A lot of end consumers [of resin] are looking for price stability from their suppliers,” he added. “Huge swings in [price] volatility cause them problems.”
To date, most activity in futures has been in North America, with most of that action focused on PP, and interest is growing.
CME Group Inc. lists PP and high density PE contracts on the New York Mercantile Exchange. The Houston Mercantile Exchange plans to offer access to those contracts in about a year.