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The London Metal Exchange (LME) has today announced changes to its plastics futures contracts for polypropylene (PP) and linear low density polyethylene (LL), which align the plastics futures contracts with the successful metals futures contracts model.
Following a recommendation from the LME Plastics Committee, and a decision by the LME Board, the Exchange will introduce the following changes:
- Changing the contracts from a free on truck (FOT) contract basis to an in-warehouse basis, as used for LME non-ferrous metals.
- The removal of the shelf life for LME Plastics Warrants to facilitate greater liquidity. Visibility of ageing warrants will continue to be provided through daily reports from the Exchange.
- Modifying the brand listing process to allow plastics merchants, traders or LME members to sponsor the listing of an LME brand.
The changes will be introduced as soon as possible and after the sufficient period of notice has been given.
Commenting on the changes, Martin Abbott, LME Chief Executive, said:
“The introduction of these changes means that the plastics contracts will operate in the same way as the established model that we have successfully used in non-ferrous metals for the last 130 years.
“Collectively, these changes will help attract more participants and material to the market; increasing liquidity and contributing to the long-term success of the contracts.”
