The London Metal Exchange has chosen Shanghai as the first stop on a global tour to drum up interest in the new contracts The London Metal Exchange (LME) has chosen Shanghai as the starting point of its first foreign roadshow for the plastics futures contracts it will launch next May. Two contracts, one each for polypropylene and linear low-density polyethylene, will begin trading on May 27, using a similar system to that used for trading metals. Futures instruments allow producers and consumers to hedge against price fluctuations. 'The total value of global plastics trading is similar to that of metals, about US$120 billion a year,' Anna Campopiano, director of corporate affairs for LME, told a press briefing at the Shanghai Futures Exchange. 'The growth rate of plastics trading is faster. We hope China will be an important customer and play a big role in the market. Its economy is very important and dynamic,' she said. The LME roadshow will move on to Singapore this week, Houston and Chicago in mid-November and Antwerp at the end of next month. Today the LME is hosting a seminar in Shanghai on the services it offers the plastics and metals industries. China is a major market for plastics. Total demand for the commodity in the motor, transportation, electronics, electrical appliances and information industries next year is expected to reach 4.5 million tonnes. China has become the largest producer and consumer of plastic sheets for farm use and will consume three million tonnes for that purpose next year, according to the Ministry of Agriculture. In the first seven months, China's imports of primary plastics weighed 10.7 million tonnes and were worth US$11.25 billion, increases of 14.2 per cent and 31.5 per cent respectively over the same period last year, according to customs figures. Per capita consumption of plastic products averages 12kg, 6kg less than the world average. A major importer, China represents both an opportunity and a threat to the industry worldwide, since it is rapidly increasing its production capacity. Ms Campopiano said that plastics had a similar industrial profile to that of metals, used by producers of packaging, vehicles and consumer goods. The global market for polypropylene is bigger than that for aluminium while the market for linear low-density polyethylene was 58 million tonnes in 2002, worth US$42 billion. Ms Campopiano said that the LME had no Chinese members as yet. 'We would be delighted to receive an application from them.' Fantastic plastic Contracts will launch next May In the first seven months, China imported 10.7 million tonnes of primary plastics Global market for polypropylene is bigger than that for aluminium
