Additional Prompt Dates
With effect from 25 June 2007, the tradable dates for plastics will mirror those for current LME non-ferrous metals contracts, with the dates as follows:
- Cash tomorrow (TOM) – first tradable on 26 June 2007 for prompt 27 June 2007
- Cash
- Every good business day out to 3 months
- Every Wednesday in months 4, 5 and 6
- Every Third Wednesday of the month in months 7 to 15
Ring Trading Times
In light of the six new regional contracts being introduced, both of the 5 minute plastics ‘ring’ trading sessions will be divided into two 2 minute trading sessions, one for LL and one for PP, separated by a 1 minute break. The regional and global contracts for each polymer will be traded in the same session, the times of which will be as follows:
|
|
Morning ring |
Afternoon ring |
|
LL |
12.20 – 12.22 |
15.35 – 15.37 |
|
Break |
12.22 - 12.23 |
15.37 – 15.38 |
|
PP |
12.23 – 12.25 |
15.38 – 15.40 |
Commenting on the announcement, Neil Banks, Director of Exchange Development, said:
“The new prompt date structure mirrors the successful model the Exchange operates for base metals, and so offers market participants the full flexibility of a wider range of dates. We anticipate, however, that the Cash and first two Third Wednesdays will attract the greatest liquidity, as it is here that the reference prices will be discovered.
“As the contracts develop and volumes increase, the LME will monitor trading to ensure that the ring trading times continue to be appropriate to the efficient establishment of its reference prices.”
Background
- The LME commenced trading in plastics futures contracts on 27 May 2005.
- Since its launch the PP contract has traded around 715,000 tonnes of material and the LL contract around 635,000 tonnes. That equates to a monetary value of approximately $715 million and $635 million respectively.
- On 5 February 2007, the LME announced the introduction of additional prompt dates and the introduction of three new regional contracts, deliverable in bags, and one in each region (Asia, Europe and North America) for each of the PP and LL contracts; the creation of six new contracts in total. Both changes are effective from 25 June 2007
- On 3 July 2006, the ‘shelf-life’ for LME plastics contracts was extended to 36 months.
- The LME is the world’s premier non-ferrous metals market and achieved volumes of 87 million lots in 2006, an increase of 10.6% on 2005 figures, and equivalent to $8,500 billion in monetary terms.
- On 4 January 2007 the LME announced its “2 by 2” growth strategy designed to double the volume of its business within the next three to five years.
- The LME launched LMEmini contracts, for Copper Grade A, Primary Aluminium and Special High Grade Zinc on 4 December 2006. The LMEminis are cash-settled monthly contracts, in smaller tonnages than standard LME contracts, and traded electronically, via LME Select, and on the Exchange’s 24 hour telephone market.
