13 July 2009 13:00 [Source: ICIS news]
By Nigel Davis
LONDON (ICIS news)--The London Metal Exchange (LME) is likely to accept advice from its members to cease open outcry or "ring trading" of plastics futures later this week, industry sources said on Monday.
The LME had proposed the change to focus the contracts on its inter-member electronic trading platform LME Select and the inter-dealer telephone market.
Trading on the global and regional contracts has been thin since launch and dropped sharply last year, although it has concentrated on the ?xml:namespace>
The LME’s Executive Committee and Board will vote on the proposal on 17 July, an LME spokesman said on Monday. The member consultation process began in May and closed at the end of June.
The move to focus liquidity on LME Select and inter-office trading is seen as temporary and an aid to focus trading on the
The open outcry, or Ring trading, on the plastics futures contracts in London helps establish the LME official prices for the regional and the global LLDPE and PP contracts at 12:30 local time each day.
The official prices for the contracts will now be derived from the electronic trades towards the end of this trading period.
Plastics trading on the LME is minimal when compared with its most heavily traded aluminium futures contracts.
Trades on the exchange last year were valued at over $10,000bn with the total number of lots traded rising 22% to 113m.
A total of 52.3m 20 tonne lots of aluminium traded on the exchange but only 4,000 24.75 tonne lots of PP and 2,000 24.75 tonne lots of LLDPE, according to LME data.
The plastics volumes were down from 9,000 lots of PP and 6,000 lots on LLDPE traded on the exchange in 2007.
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