CME Transacts First Electronic Physical Aluminum Auction

CME Transacts First Electronic Physical Aluminum Auction

CME Group, the world’s leading derivatives marketplace, announced that physical aluminum was transacted for the first-time ever on CME Group’s electronic auction platform. On Thursday, March 3, 2022, 200 metric tons of P1020A aluminum were auctioned for delivery in Owensboro, Kentucky. The transaction was completed at a price of 35.50 cents per pound premium to CME Group’s physically-delivered Aluminum futures March 2022 contract, which settled at $3767.75 per metric ton on the same day.

“We are pleased to complete the first-ever transaction of aluminum through our auction, providing the marketplace with an innovative risk management solution designed to meet the needs of the aluminum community,” said  Jin Chang, Managing Director and Global Head of Metals at CME Group. “This comprehensive solution will help enhance price discovery in the physical aluminum market, providing a platform where all attributes of the transaction are disclosed and transparent.”

“We applaud the CME Group for introducing an aluminum auction to the physical aluminum community,” said  Fred Demler, Executive Vice President and Global Head of Metals at ED&F Man Capital Markets. “This new tool will help us support our clients to better manage their price volatility in premium aluminum moving forward.”

“We are proud to be part of this market first, working with CME Group to help pioneer innovative trading solutions,” said  Jeff Ollada, Managing Director in the Futures Division of Mizuho Americas. “Creating spot price discovery in the aluminum market will drive greater efficiencies for our clients and their counterparties among an important market segment for the global economy.”

The electronic auction included 17 participants. Bids placed in the auction were priced on CME Group’s Aluminum futures (ALI). The aluminum auction was launched to support established aluminum markets and provide a platform for market participants to transact physical material anonymously in the spot market.

Source: CME

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