Winter Park, Florida 30/03/2016 - The CME Group's aluminium European premium duty-paid (DP) futures contract traded for the first time last Thursday, the exchange said in a release.
A total of 96 futures contracts were traded, equalling 2,400 tonnes at $136 per tonne. The trade was spread out evenly from July to December with 16 lots transacted for each month, according to exchange data.
The aluminium European premium duty-paid futures are 25 tonnes in size and are financially settled against the Metal Bulletin assessment of duty-paid aluminium spot price transactions in Europe. It is listed on the Comex division of the New York Mercantile Exchange and was launched on March 21.
CME's other existing aluminium products include the Platts US Midwest transaction premium (AUP) contract, the Metal Bulletin European premium duty-unpaid (DUP) contract, and the Platts Major Japanese Ports (MJP) premium contract as well as a physically delivered aluminium futures (ALI).
"The European premium duty-paid contract was the missing building block in the Premium markets,” Samuel Marque, head of metals trading at UniCredit, said in a statement. “We see it as an important tool to diversify our sources of liquidity in a market that was mostly OTC and dominated by a small number of players."
CME has had more luck to date with its premium contracts than the London Metal Exchange, which rolled out it's own premium contract in November without much success thus far.
The CME's US Midwest AUP contract has been the bellwether in terms of global aluminium premium contracts. AUP open interest currently stands at 26,385 lots or 659,625 tonnes.
The AUP contract has returned to a contango with the March contract at 8.07 cents per pound, while the April-June months are at 8.45 cents and July-December are at 8.25 cents.
The other CME premium contracts have also traded, although at significantly lower volumes. Open interest in the European DUP contract is at 6,051 lots or 151,000 tonnes followed by the MJP contract at 1,422 lots or 35,550 tonnes.