International derivatives marketplace CME Group Inc (NASDAQ:CME) today announced it will boost further its base metals offering through the launch of a new Aluminium European Premium Duty-Unpaid (Metal Bulletin) futures contract.
Trading with the new contracts is set to commence on September 21, 2015. Following relevant regulatory review periods, the new contract will be available for trading on CME Globex and for submission for clearing through CME ClearPort.
“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 aluminium 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 aluminium industry around the globe. We continue to work closely with the industry to provide them with innovative new solutions to manage aluminium premium volatility, which has reached record levels during the last three years.”
These new contracts will add to CME Group’s existing range of aluminium risk management tools, including its Aluminum MW U.S. Transaction Premium futures and physically delivered Aluminum futures.
The company notes that industry participation in the Aluminum Midwest Premium contract has steadily risen, trading the equivalent of more than 650,000 metric tons since their launch in April 2012 and hitting a record 19,335 contracts open interest on September 1, 2015.
Aluminum futures, which were introduced in May of last year, are used as a reference price for the North American aluminium industry and rnable participants to better manage their price risk.
The Aluminium European Premium futures contract will be 25 metric tons in size and will be financially settled against the Metal Bulletin assessment of aluminium spot price transactions in Europe.
To view the official announcement by CME, click here.