CME Group – First Trades of North American Physically Delivered Aluminum Futures

CME (Chicago Mercantile Exchange) Group announced the first North American physically delivered aluminum futures contracts were traded on May 6, by executing firm Macquarie Bank Limited. “Macquarie provides clients globally with metals-related risk management trading and hedging services, including a full range of futures execution and clearing services. We are very honored to be the first to trade CME Group’s aluminum futures contracts, underlining our commitment to supporting our corporate and industry clients,” said Matthew Forgham, Macquarie Bank’s managing director in FICC.

A total of 56 contracts were traded in four different expiry months on May 6. “We’re pleased to see broad-based support for our new North American physical aluminum futures contract on day one,” said Derek Sammann, CME Group’s senior managing director of FX, Metals and Options Solutions. “By working with key producers, consumers and merchant traders in the aluminum market to develop this product, we believe that it will allow participants to better manage their price risk and will serve as the premier price reference for the North American aluminum industry.”

A number of industry participants and commercial end users of aluminum have also expressed support for the new aluminum futures contract from CME Group.

“UC Rusal is supportive of alternative markets for the hedging and physical delivery of aluminum,” commented Steve Hodgson, director of Sales and Marketing, UC Rusal. “We see CME Group’s new aluminum contract as an important pricing option for those of our North American customers who are looking to hedge the all-in price.”

“I applaud CME Group for responding to the concerns of aluminum users like MillerCoors and bringing this new risk management tool to market,” said Tim Weiner,global risk manager, MillerCoors. “We firmly believe the contract can become the new benchmark for the North American aluminum industry. We’re enthusiastic about this contract and stand ready to support it by hedging our aluminum exposure.”

“We are hopeful that the new CME Group contract will improve transparency and price discovery in the U.S. market, and that it will give us another tool to better manage our aluminum price risk,” said Lance Mitchell, ceo, Reynolds Consumer Products.

North American physically delivered Aluminum futures contracts are listed by and subject to the rules of COMEX.

Source: CME Group Press Release, May 7, 2014

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Light Metal Age is the pre-eminent magazine of the light metal world. For 72 years, Light Metal Age has covered mainly primary production and semi-fabrication of aluminum, as well as titanium and magnesium.

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