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To compete with the LME, the CME will launch aluminum options on May 23, pending regulatory approval, according to their press release from yesterday. The new aluminum will be derivatives of the current physically-delivered CME aluminum futures. In the press release, CME Group’s Global Head of Metals, Jin Chang, states, “Our new option contract is the latest example of CME Group's decade-long track record of helping the aluminum community to manage risk as their needs evolve,” adding “a record 4,888 Aluminum futures contracts traded on April 19 and average daily volume in April currently around 1,300 contracts, up over 100% from last year.” The CME introduced its aluminum futures in 2014. |
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If these options gain popularity, they could be another risk-mitigation tool to aluminum consumers to set upper limits on their aluminum input costs. LME aluminum options already exist, with good liquidity. The CME version's slightly different specifications may make them a better tool in specific situations. Consumers who are concerned about their aluminum costs should consider financial swaps or purchasing call options. Such positions are standard for consumer hedging, but they can result in opportunity costs or cash costs if metal prices decline. Please contact AEGIS for specific strategies that fit your operations. (4/27/2022) |
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. |
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Price Indications |
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We are having trouble with pulling indications for zinc, copper, and nickel this morning. Current clients can contact metals@aegis-hedging.com for aluminum indications. |
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Today's Charts |
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AEGIS Insights |
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04/20/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 04/21/2022: Russian Metals Production and Related News: Most Recent Developments (AEGIS Reference) |
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| Important Headlines | ||
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4/25/2022: Column: Bears tip-toe back into copper market as demand fears grow 4/24/2022: Indian aluminium producer NALCO faces coal scarcity due to train shortage 4/22/2022: March 2022 crude steel production |
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| Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program.
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