Fri, 04/03/2016 - 16:07
CME Group is expanding its base metals offering with the introduction of a new Aluminium European Premium Duty-Paid (Metal Bulletin) futures contract to begin trading on 21 March, 2016.
Pending relevant regulatory review periods, the new contract will be available for trading on CME Globex, for submission for clearing through CME ClearPort, and will be listed with and subject to the rules and regulations of COMEX.
"This new contract complements our existing regional aluminium premium futures contracts, and will enable a broader and more diverse set of our European customers to hedge their exposure to the aluminium premium," says Young-Jin Chang (pictured), CME Group Executive Director of Metals Products. "Our new Aluminium European Premium Duty-Paid contract responds to commercial customer demands for a solution to manage their premium price risk and builds on the successful launch of our Aluminium European Premium Duty-Unpaid European premium futures last year."
"Volatile aluminium premiums have had a major impact on the market over recent years, and the previous lack of a good hedging mechanism has resulted in huge financial uncertainties for buyers," says Raju Daswani, Metal Bulletin Managing Director. "With the success of CME Group's duty-unpaid aluminium premium contract, settled against Metal Bulletin's industry benchmark, it is imperative that the same hedging opportunity now be provided to the duty-paid market, which is a liquid trading arena that is highly relevant to major European manufacturers."
This new Aluminium European Premium Duty-Paid (Metal Bulletin) futures contract will complement CME Group's existing suite of aluminium risk management tools, including its Aluminum Japan Premium (Platts) futures, Aluminium European Premium Duty-Unpaid (Metal Bulletin) futures, Aluminum MW U.S. Transaction Premium Platts futures and physically delivered Aluminum futures.
Industry participation in CME Group's suite of regional aluminium premium futures contracts has steadily increased. Since its April 2012 launch, the Aluminum MW US Transaction Premium futures contract has traded the equivalent of more than 1,368,475 metric tons and reached record open interest of 27,227 contracts on 1 March 2016. The existing Aluminium European Premium futures contract has traded 150,050 metric tons and reached a record of 5,127 contracts open interest on 1 March 2016 since it began trading in September 2015. Since launch in December 2015, Aluminum Japan Premium futures contracts have traded 45,075 metric tons and reached a peak of 1,608 open interest on 1 March 2016.
Aluminium European Premium Duty-Paid (Metal Bulletin) futures will be 25 metric tons in size and will be financially settled against the Metal Bulletin assessment of aluminium spot price transactions in Europe.
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