CME Group recently announced it will expand its base metals offerings with the introduction of a new Aluminum European Premium Duty-Unpaid futures contract to begin trading on September 21. Pending relevant regulatory review periods, the new contract will be available for trading on CME Globex and for submission for clearing through CME ClearPort, and will be listed with and subject to the rules and regulations of COMEX.
“Our new contract will be the first viable exchange-traded futures product to enable customers and market participants to hedge their exposure to the European aluminum premium,” said Young-Jin Chang, CME Group Senior Director of Metals Products. “This is a continuation of our commitment to engage with customers and market participants in the aluminum industry around the globe. We continue to work closely with the industry to provide them with innovative new solutions to manage aluminum premium volatility, which has reached record levels during the last three years.”
These new contracts will complement CME Group’s existing suite of aluminum risk management tools, including its Aluminum MW U.S. Transaction Premium futures and physically delivered Aluminum futures. Industry participation in the Aluminum Midwest Premium contract has steadily increased, trading the equivalent of more than 650,000 metric tons since their launch in April 2012 and reaching a record 19,335 contracts open interest on 1 September 2015. Aluminum futures, which were introduced in May of last year, serve as a reference price for the North American aluminum industry and allow participants to better manage their price risk.
The Aluminum European Premium futures contract will be 25 metric tons in size and will be financially settled against the Metal Bulletin assessment of aluminum spot price transactions in Europe.