New aluminum futures to provide North American benchmark for managing price risk.
Chicago-based CME Group, which operates a derivatives marketplace, has announced plans to launch North American physically delivered aluminum futures contracts beginning May 5, 2014, pending all regulatory approvals.
CME says the new contract will build on the firm’s existing suite of base metals products, including the Aluminum MW U.S. Transaction Premium Platts (25MT) futures contract, which was introduced in April 2012. These new aluminum futures contracts will offer global aluminum market participants a new tool for managing their exposure to volatile North American prices while giving them access to physical aluminum at a number of CME Group-approved warehouses across the United States, the company says.
“Aluminum is an indispensable part of our daily lives and is used in everything from building materials and transportation to packaging and wiring,” says Harriet Hunnable, CME Group Metals Products managing director. “Our customers want a North American physically deliverable aluminum futures contract from CME Group that provides them with greater transparency.
“Together with our Aluminum Midwest U.S. Premium contract, this new benchmark will enable industry participants to better hedge their North American aluminum price risk,” Hunnable says.
CME says the contracts will be 25 metric tons in size and will be introduced at a time when Midwest premium prices have increased more than 50 percent since the start of the year as a result of growing demand for this industrial metal coupled with supply constraints in the United States.
The new aluminum futures contracts will be available for trading on the floor and electronically via CME Globex as well as submission for clearing through CME ClearPort and will be listed by and subject to the rules of COMEX.
More information is available at www.cmegroup.com/aluminum.