Physical Aluminum Transacted for First Time on CME Group's Electronic Auction Platform

Rhea-AI Summary

CME Group announced the successful transaction of physical aluminum on its electronic auction platform for the first time on March 3, 2022. A total of 200 metric tons of P1020A aluminum was auctioned at a premium of 35.50 cents per pound to the March 2022 aluminum futures price, which settled at $3767.75 per metric ton. The auction involved 17 participants and aims to enhance transparency and price discovery in the aluminum market. Industry leaders praised the initiative as a valuable tool for managing price volatility.

Positive

• First-ever physical aluminum transaction executed on CME's electronic auction platform, expanding market offerings.
• Auction pricing provides enhanced transparency and price discovery for the aluminum community.
• Support from industry leaders indicates strong market confidence in CME's new auction tool.

Negative

• None.

CHICAGO, March 7, 2022 /PRNewswire/ -- CME Group, the world's leading derivatives marketplace, today 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.

For more information on CME Group's aluminum auction operated by CME Platforms Inc., please see here.

About CME Group

As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex® platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. 

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and, E-mini are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. BrokerTec and EBS are trademarks of BrokerTec Europe LTD and EBS Group LTD, respectively.  Dow Jones, Dow Jones Industrial Average, S&P 500 and S&P are service and/or trademarks of Dow Jones Trademark Holdings LLC, Standard & Poor's Financial Services LLC and S&P/Dow Jones Indices LLC, as the case may be, and have been licensed for use by Chicago Mercantile Exchange Inc.  All other trademarks are the property of their respective owners. 

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SOURCE CME Group

FAQ

What significant event occurred for CME on March 3, 2022?

On March 3, 2022, CME Group executed its first-ever transaction of physical aluminum on its electronic auction platform.

How much aluminum was auctioned during the first transaction?

A total of 200 metric tons of P1020A aluminum was auctioned.

What was the price premium for the aluminum auction conducted by CME?

The aluminum was auctioned at a premium of 35.50 cents per pound to the CME Group's aluminum futures contract.

How does CME's aluminum auction benefit market participants?

The aluminum auction enhances price transparency and helps market participants manage price volatility.

How many participants were involved in the CME aluminum auction?

There were 17 participants in the electronic auction for aluminum.