The London Metal Exchange (LME), the world's largest non-ferrous metals market, is looking to build on a solid 2005 performance, adding more plastics futures and extending electronic trading times.
"2003 and 2004 were both good years, and so far business is up this year. People remain interested in commodities and we are seeing good growth," LME Chief Executive Simon Heale said.
The LME set itself certain targets for 2005, which it met, such as launching the world's first plastics futures in May and increasing trade transparency, he said in an interview.
It is on schedule to upgrade its electronic trading system, known as Select, in November, while in 2006 screen-trading hours will be extended to capture overnight Asian market business once local regulatory procedures are in place.
"Our intention is to extend the hours next year," Heale said.
Heale said another plastics contract might not be ready for launch until late 2006.
"We are looking at bottle-grade PET ((polyethylene terepthalate), but we have not yet gone to the board with a proposal," he said.
That might not be until near the end of this year, so any decision to launch would not be until early next year.
"It may not happen in 2006 as we have to consider marketing, getting clearing systems in place...But we would love to do it in 2006," he added.
PET will join polypropylene (PP) and linear low-density polyethylene (LLDPE), and the exchange will also start issuing warehouse inventory figures for plastics on January 20, 2006.
The LME is also taking another look at steel, after these were shelved in 2003. Earlier this year, the LME set up a committee to look at the desirability and feasibility of steel futures, and it will report to the board later on Friday.
"The board has received a paper this week and that paper has some conclusions. They will decide 'yes' or 'no'," he said.
Storage, the delivery option and finding a common specification for a varied product were among the factors that held up the previous launch. This time, a cash-settled contract may be proposed.
Heale said the LME will maintain its policy of offering different trading methods - the screen, the open-outcry floor and inter-office pre-market telephone market. Ultimately, the market will decide which to favour.
"Select is growing, but that is at the expense of the pre-market - the ring has been very robust this year."
The LME is unique in that it retains a vibrant trading floor, where the all-important daily settlement prices are reached, while nearly all other exchanges in Europe have migrated to screens.
Heale said there were no pressures for the LME to consider following a similar route and closing its floor.
"There may well come a point when that will happen, but I don't see it in the short term. But if a certain number decided to switch, then we would encourage others."
Heale said the LME was looking to end its temporary suspension of New Orleans as a delivery point as soon as possible, although this depended on operations getting back to normal.
"We hate suspending warrants and we hate having to introduce backwardation limits. Our view is to intervene as little as possible and it is our intention to minimise our intervention as soon as possible," he said.
Warranting and inward deliveries of LME metal, with zinc, copper and aluminium stored in sheds in New Orleans, has been suspended since September 6, due to uncertainty over conditions after Hurricane Katrina caused widespread flooding.
Earlier this month, the LME put in place interim procedures to gather information and lift the suspension by allowing warehouses to "self-certify" metal, as well as certification by independent agents.
Heale said that to quicken up the process, the board, which usually only meets once a month, may mandate the LME's executive committee to lift suspensions.
"It all comes down to security, storage, cleanliness and proper staffing," Heale said.
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