Effective 25 June 2007, the Exchange will introduce three new regional contracts, in addition to the existing global contracts, and it will introduce additional prompt dates to more closely reflect the prompt date system currently available for non-ferrous metals.

The changes to the contracts are the result of a recommendation from the LME Plastics Committee, which includes wide representation from across the plastics industry, and follows detailed consultation with the Exchange’s members and stakeholders.

Regional Contracts

• The introduction of three new 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.
• Contract specifications and delivery points for each regional contract will be identical to their existing equivalent global contract.
• All brands that meet the listing criteria for global contracts will be automatically listed for the relevant regional contract.

Additional Prompt Dates

New prompt dates will be introduced, across the global and new regional contracts, to provide more granularity in the nearby dates and therefore to facilitate spot trading:

• Trading for prompt dates 1 (TOM) and 2 (Cash) days forward will be available on a rolling basis. Additional prompt dates will be allowed in the nearby weeks, and monthly prompt dates in the forward month basis the Third Wednesday of the month, will continue.
• The LME Official Prices will be the Cash price and the first and second month prices (Third Wednesdays), with the current third month price being dropped, no longer being an Official Price.

Commenting on the announcement, Neil Banks, Director of Exchange Development, said:

“Since launch, the LME plastics contracts have operated successfully, but early on we acknowledged that further changes were required to ensure that the contracts gain traction and become more widely accepted.

“After close monitoring of trading performance and activity, and after feedback from the industry and market users, we believe that the time is now right to introduce these changes. The changes will revitalise the contracts, significantly improving liquidity, and therefore, allowing the contracts’ wider use within the plastics industry.”

Notes for Editors

1. The LME commenced trading in plastics futures contracts on 27 May 2005.
2. Since their 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.
3. On 3 July 2006, the ‘shelf-life’ for LME plastics contracts was extended to 36 months.
4. 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.
5. 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.
6. 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.

Press enquiries to:       Adam Robinson: +44 207 264 5532