CME says A380 contract records first trades

Chicago-based CME Group says its first Aluminum A380 Alloy (S&P Global Platts) futures contracts were traded on Tuesday, July 19, 2016. A total of 50 futures contracts were traded across the August through December 2016 contract months for the secondary aluminum alloy.

“We’re pleased to see early support for our new Aluminum A380 Alloy (S&P Global Platts) futures contract,” says Young-Jin Chang, CME Group executive director and global head of metals products. “Working with the industry, we believe we’ve introduced risk management tools that better reflect the way commercial customers price their physical contracts based on the Platts assessment of A380 alloy. This new contract provides our customers with an effective and transparent solution for hedging aluminum alloy price risk.”

“We’re excited to have traded these new aluminum A380 alloy contracts,” says Andre Marshall, the founder of Houston-based Crunch Risk LLC. “We’ve seen a great deal of commercial interest in these new aluminum alloy contracts and are optimistic that this latest innovation from CME Group can replicate the growth and success of the Midwest and European contracts as participants become more familiar with using them to manage price risk in their business.”

Aluminum A380 alloy (S&P Global Platts) futures are 44,092 pounds (equivalent to 20 metric tons) in size and financially settled against the S&P Global Platts assessment of its Midwest U.S. A380 Alloy price.

The aluminum A380 alloy is described by Platts as “made predominately of scrap material” and suitable for die casting and foundry applications.