CME logs record first-quarter volumes

CME Group's average daily volumes reached an all-time high of 22.2 million contracts in the first quarter, up 30% year on year, the exchange said on Tuesday April 3.

Metals volumes stood at 713,000 contracts per day during the quarter, up 39% from the first three months of 2017. Option volumes averaged 4.9 million contracts per day, up 31% in the same comparison.

While China and the United States clash over tariffs and intellectual property theft, opening the door for a prolonged trade war, the CME is benefiting from the spike in volatility.

Copper prices crashed in March following President Donald Trump’s signing of aluminium and steel tariffs and pivot to targeting China for potential import restrictions that could cost the Asian country $50 billion. The world’s second-largest economy launched its own retaliatory tariffs on US goods, such as pork and soybeans.

Ongoing uncertainty increases volatility, which in turn leads investors to migrate to exchanges like the CME where they can hedge risk, CME global head of metals products Young-Jin Chang told American Metal Market in an interview earlier this year.

But that has not translated to higher US copper premiums. Still, April is traditionally when demand peaks, consumer interest leads to increased spot deals and copper premiums experience upward pressure.

American Metal Market’s assessment of the US Midwest copper cathode premium was at 5.5-6 cents per lb on April 3, unchanged since late January.

Some analysts are optimistic that prices will rise in the coming months, with INTL FCStone analyst Edward Meir indicating this week that the market is oversold, drawn down by exaggerated trade fears.

What to read next
Saudi Arabia, through its spearheading of a mining and minerals production and consumption push in the Middle East, a region usually associated with oil and gas, is leading neighboring countries to increase their presence in the base metals markets
Indonesia is preparing to invest more in its aluminium supply chain as part of its wider critical metals strategy, Fastmarkets understands
Market sentiment remain mixed on whether the investigation will impact aluminium prices and production
Aluminium premiums in all key regions remained well-supported in the week to Tuesday June 18, amid ongoing reports of tight availability, while market participants in Europe and Asia are focusing on ongoing negotiations for Japanese third-quarter supplies
The Kingdom of Saudi Arabia’s (KSA) ambitious plan to diversify away from oil and into metals will increase local nickel consumption and fund international mining projects, given recent massive investments in nickel-intense industries
Fastmarkets proposes to amend the name of the MB-AL-0231 Aluminium P1020A all-in price, delivered Midwest US, US cents/lb to clarify that the price is based on the London Metal Exchange cash aluminium price.