CME Group posts record daily volumes for aluminium futures contract in October

The CME Group has tripled the volumes traded on its physically delivered global aluminium futures contract since the first quarter of 2022 - reaching a single-day high of 7,929 contracts on October 5, with a daily average of about 3,000 contracts so far this month and open interest at a record 1,411 contracts on October 19

“We continue to make... progress in growing our physically delivered aluminium futures and offering market participants an alternative way to manage their aluminium price risk,” Jin Chang, CME Group’s managing director and global head of metals, said on Tuesday, October 25.

“Our growth in aluminium... has really accelerated since March [this year],” she said.

The third quarter also saw a record volume of over 2,300 contracts per day, surpassing the previous quarterly record by approximately 1,000 contracts, while July and September were the top two trading months ever, with 2,659 and 2,642 contracts per day respectively.

CME Group also announced that it would expand financial services company and commodities broker Marex’s client access to its base metals markets, starting with its global aluminium futures contract.

Chang said that partnering with a broker such as Marex would mean that more volumes of aluminium will be traded on the exchange.

The CME also has a number of cash-settled aluminium premium contracts, including the European duty-paid aluminium premium contract, which have built up a significant forward curve since its launch in 2016.

The contracts are cash-settled and based on the average of Fastmarkets’ aluminium P1020A, Rotterdam duty-paid premium.

Fastmarkets most recently assessed the aluminium P1020A premium, in-whs dp Rotterdam at $265-300 per tonne on Tuesday, down by $25-30 per tonne from $290-330 per tonne one week earlier.

The premium has fallen from all-time highs of $600-630 per tonne earlier this year amid sustained volatility across the markets following global geopolitical tensions and a changing macroeconomic picture.

“It was about creating a viable alternative [exchange offering] so what we’ve done, instead of launching a bunch of contracts and seeing what sticks, [has been to be] strategic about continuously growing momentum and working to grow the liquidity,” Chang said.

“Our around-the-clock access, global footprint and industry-leading technology are strong competitive advantages and we... will offer our aluminium markets on [our] Neon Metals platform as part of the global expansion plan [for that service],” she added.

Marex president Simon van den Born said: “Expanding into CME Group’s aluminium markets responds directly to demand from our clients for access to alternative markets, but also aligns with our strategy to build a more global, technology-focused presence [to] better serve our client needs now and into the future.

“To complement the market access, we will also expand our research and markets coverage to include CME Group’s aluminium and other base metals markets. This [will] support the CME Group’s efforts to create a more robust marketplace that benefits the entire industry,” he added.

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