CME Group to Launch North American Physically Delivered Aluminum Futures
New product will provide global aluminum industry participants with a new
North American benchmark for managing price risk
NEW YORK and LONDON, March 18, 2014
NEW YORK and LONDON, March 18, 2014 /PRNewswire/ -- CME Group, the world's
leading and most diverse derivatives marketplace, announced today it will
launch North American physically delivered Aluminum futures contracts to begin
trading on May 5, 2014, pending all regulatory approvals.
CME Group logo.
This new contract will build on CME Group'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 U.S.
"Aluminum is an indispensable part of our daily lives and is used in
everything from building materials and transportation to packaging and
wiring," said 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
These 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 U.S.
"We use aluminum extensively in our packaging and it's one of the single
largest commodity price risks we face today as a company and an industry,"
said Tim Weiner, MillerCoors Global Risk Manager. "We see this North American
aluminum contract, which will combine both the underlying price of aluminum
along with the premium, as a potentially useful tool to help us eliminate many
hedge accounting issues."
This new benchmark will serve as the price reference for the North American
aluminum industry and allow participants to better manage their price risk.
Tri-Arrows Aluminum Inc. Chief Operations Officer David Brown said, "We
believe this new aluminum futures contract will give us the ability to hedge
aluminum price risk, including the North American premium, further out along
the curve than we are able to with existing risk management products today."
The exchange's existing Aluminum Midwest U.S. Premium futures contract is
financially settled and has traded the equivalent of more than 16,000 metric
tons since the start of 2014.
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.
For more information about Aluminum futures visit www.cmegroup.com/aluminum.
As the world's leading and most diverse derivatives marketplace, CME Group
(www.cmegroup.com) is where the world comes to manage risk. CME Group
exchanges offer the widest range of global benchmark products across all major
asset classes, including futures and options based on interest rates, equity
indexes, foreign exchange, energy, agricultural commodities, metals, weather
and real estate.CME Group brings buyers and sellers together through its CME
Globex^® electronic trading platform and its trading facilities in New York
and Chicago. CME Group also operates CME Clearing, one of the world's leading
central counterparty clearing providers, which offers clearing and settlement
services across asset classes for exchange-traded contracts and
over-the-counter derivatives transactions. These products and services ensure
that businesses everywhere can substantially mitigate counterparty credit
CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and
Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange
Inc. CBOT and the Chicago Board of Trade are trademarks of the Board of Trade
of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and
ClearPort are registered trademarks of New York Mercantile Exchange, Inc.
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Further information about CME Group (NASDAQ: CME) and its products can be
found at www.cmegroup.com.
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SOURCE CME Group
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