Seattle, WA, USA--(Jobwerx News)--Polypropylene and linear low-density polyethylene plastics futures contracts opens on The London Metal Exchange.

New trading of two plastics futures at the LME opened today via the electronic trading system and the new financial tool will help Plastics Companies manage their price exposure to volatile polymer prices. The two new Futures contracts are Polypropylene and Linear Low-Density Polyethylene. PP is used for plastic bags and bottles, while LL is used for automotive trim.

Since announcing its intention to launch the contracts, the LME has undertaken detailed research and consultation to ensure the contract specifications fully meet the needs of the plastics packaging industry. To help organizations understand the implications and practicalities of futures contracts, the LME has also carried out an extensive schedule of international roadshows and is now also delivering an educational training programme, details of which can be found on the LME web site.

The LME is the world’s premier non-ferrous metals market. It is a successful exchange with highly liquid contracts and a turnover value of some US $3,500 billion per annum. It is a major contributor to the UK’s invisible earnings, responsible for more than £250 million in overseas earnings each year.

The fluctation of polymer prices, due to the cost of raw materials, for the plastics industry in the past year alone requires the means of managing price volatility and subsequent margin risks. Profit margins in 2004 for plastics producers, molders and converters has seen a severe struggle at the bottom of a long cycle.

The PP and LL plastics futures contracts being offered by the LME are designed to offer pricing consistency. These grades will establish global prices on the exchange and will allow for the pricing of more specialized grades to be priced at a premium to the base price. These contracts will be useful all along the plastics packing supply line, including primary producers, converters and logistics companies.

These LME Plastics futures contracts will create a change in the industry in the way prices are reported globally and regionally.

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