American derivatives marketplace CME Group (Chicago Mercantile Exchange & Chicago Board of Trade) announced two new futures contracts on Monday. Both will be contracts for aluminium oxide, or alumina.
According to the relevant press release, CME Group will be offering Alumina FOB Australia (S&P Global Platts) futures and Alumina FOB Australia (Metal Bulletin) futures for trading in late September. Assuming regulatory hurdles are overcome, the futures will trade on CME Globex, for submission for clearing through CME ClearPort, and will be listed with and subject to COMEX (Commodity Exchange, Inc.) rules.
“These two new Alumina futures contracts are an innovative solution designed to help our customers better manage risk across multiple sources of volatility,” said CME Group Global Head of Metals Products Young-Jin Chang. “As we continue to experience strong momentum across our aluminum product suite, we are committed to working with market participants and customers in the aluminum industry around the world to meet their evolving needs.”
Commodity futures traders hailed the new contracts as long-needed vehicles for trade in the aluminium precursor.
“We are pleased to see the creation of a liquid, transparent futures market for fixed price alumina,” said ARG International AG trader Zach Mayer. “We believe there is now, and has been for years, strong demand for a product of this nature, from various participants in the alumina market globally, and we look forward to transacting in this new market for years to come.”
CME Group says the Alumina FOB Australia (Metal Bulletin) futures will consist of 100 metric tons of alumina and will be financially settled every month against the weekly price index published by Metal Bulletin for Alumina FOB Australia.
Alumina FOB Australia (S&P Global Platts) futures will also be 100 metric tons, but will be financially settled each month against the S&P Global Platts daily price index for Alumina FOB Australia.