About lme

The London Metal Exchange (LME) is a futures market for non-ferrous metals. Futures contracts are standardized contracts on size, product, packaging and location. The only variable is the price. The primary roles of the LME are to provide participants the opportunity to protect there activities against risks arising from movements in base materials prices, to provide reference prices which are accepted globally and widely used in the non-ferrous metals and plastics industries for benchmarking, and to provide storage and delivery facilities to enable market participants to make or take physical delivery of approved brands of LME traded contracts.

The LME first launched the idea of creating a Futures Market for Plastics at the end of 2003. Believing that plastics and metal have a lot in common in structure and size, the LME saw an opportunity in the plastics market. The futures and options markets in metals are well established, but the plastics industry still doesn't have a possibility to minimize the price risk in a very volatile market.

The LME choose to first launch 2 global contracts, one for PP and one for LLDPE. Later, in June 2007, 6 additional contracts were launched: 3 regional contracts for PP - USA, Europe, Asia - and 3 regional contracts for LL. By launching these new contracts, the LME hopes that prices will be a better reflection of the physical market.

In August 2005 the Multi Commodity Exchange of India (MCX) in Mumbai has also launched Plastics Futures Contracts for PP and HDPE.

In January 2007 Dubai Multi Commodities Centre has announced it will also launch several Plastic Futures Contracts.