Fantastic plastic's path to liquidity
Since their launch early in 2006, the London Metal Exchange's plastics futures contracts have grown steadily in volume terms. Neil Banks from the exchange reviews their performance and explores some of the factors ensuring there is a healthy contract liquidity
On 27 May 2005 the London Metal Exchange (LME) launched two futures contracts for plastics; polypropylene and linear low-density polyethylene, alongside its existing contracts for aluminium, copper, nickel, zinc, tin and lead, and its metals index contract, LMEX.
Surprisingly, there are marked similarities between the plastics and metals industries. Both are industrial raw materials, both have comparable industrial processes from mining through to recycling and both are worth approximately $120bn
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