Alumina FOB Australia Futures Overview

  • 7 Sep 2016
  • By CME Group
  • Topics: Metals

The Contracts

Alumina FOB Australia (Platts) Futures (ALA) and Alumina FOB Australia (Metal Bulletin) Futures (ALB) contracts are a part of CME’s global suite of Aluminum contracts which include Aluminium MW U.S. Transaction Premium Platts (25MT) Futures, Aluminium European Premium Duty-Unpaid (Metal Bulletin) Futures, Aluminium European Premium Duty-Paid (Metal Bulletin) Futures, Aluminum Japan Premium (Platts) Futures, and Aluminum A380 Alloy (Platts) Futures contracts.

The two new Alumina FOB Australia futures contracts offer the opportunity for industry participants to manage price risk exposure in the alumina market. This world first, exchange- traded, cash-settled futures contract offers aluminium and associated industries the ability to effectively mitigate alumina price risk exposure.

Using ALA and ALB contracts, market participants have the ability to employ a range of derivatives strategies from protecting margins, hedging physical long positions to offering floating and fixed price physical transactions. Market participants will have the ability to mitigate their alumina price risk more closely using a futures contract settling against either S&P Global Platts Alumina Index FOB Australia (PAX Australia) or Metal Bulletin’s FOB Bunbury, Australia Alumina Index.

Benefits

  • Cash settled
  • True intraday price and spread transparency across the futures’ curve
  • Security through centralized clearing, guaranteed counterparty credit and segregation of customer funds through CME Clearing
  • Easily accessible electronic execution
  • Daily mark-to-market of positions

Market Participants

Market participants with access to CME ClearPort and CME Globex will be able to utilize this contract. Interest has come from commercial participants involved in the alumina and aluminium  value chain including miners, smelters, distributors, merchants, consumers, and banks.

Ease Of Access

The Alumina futures contracts are available to trade on CME Globex via CME Direct, CME Group’s free front-end trading platform for accessing CME Group markets. CME Globex operates as a Central Limit Order Book, or CLOB. Both ALA and ALB are also available for clearing on CME ClearPort for privately negotiated trades.

CME Globex

The CME Globex platform was the first - and remains among the fastest global electronic trading systems for futures and options. Through its advanced functionality, high reliability and global connectivity, it is now the world’s premier electronic marketplace for derivatives. To learn more about CME Globex, visit cmegroup.com/globex.

CME Direct

Delivered securely across the Internet, CME Direct is a highly configurable trading front end for CME Group markets that offers a complete suite of solutions across the trading lifecycle. To learn more about CME Direct, CME Group’s free trading front end, visit cmegroup.com/direct.

CME ClearPort

CME ClearPort is a comprehensive set of flexible clearing services for the over-the-counter (OTC) market. Launched in 2002 to provide centralized clearing services and mitigate risk in the energy marketplace, CME ClearPort today serves as a gateway for a diverse slate of asset class transactions submitted for clearing. With OTC clearing through CME ClearPort, you can continue to negotiate your own prices privately and conduct business off exchange – but you gain increased security and efficiency.

To register for clearing through CME ClearPort, you must establish an account with a COMEX Clearing Member and complete the Exchange User License Agreement (EULA) available at cmegroup.com/clearport.

Once you have received your username and password, contact your Clearing Member Firm and request that your clearing account be added to RAV (Risk Allocation Value) Manager. For more information about clearing member firms, please visit cmegroup.com/tools-information/clearing-firms.html.

Contract Specifications

  Alumina FOB Australia (Platts) Futures (ALA) Alumina FOB Australia (Metal Bulletin) Futures (ALB)
Contract Unit 100 metric tons
Price Quotation U.S. dollars and cents per metric ton
Trading Hours CME Globex and CME ClearPort: Sunday – Friday 6:00 p.m. – 5:00 p.m. (5:00 p.m. – 4:00 p.m. (Chicago Time/CT) with a 60-minute break each day beginning at 5:00 p.m. (4:00 p.m. CT)
Minimum Price Fluctuation $0.01 per metric ton
Product Code CME Globex: ALA CME ClearPort: ALA Clearing: ALA CME Globex: ALB CME ClearPort: ALB Clearing: ALB
Listed Contracts Monthly contracts listed for 12 consecutive months.
Settlement Method Financially Settled
Floating Price The Floating Price for each contract month shall be equal to the arithmetic average calculated to two decimal places of each available daily price Index published for Platts Alumina Index FOB Australia (PAX Australia) US$ per metric tonne for that given calendar month by S&P Global Platts. The Floating Price for each contract month shall be equal to the arithmetic average calculated to two decimal places of each available weekly price Index published for Metal Bulletin’s FOB Bunbury, Australia Alumina Index US$ per dry metric tonne for that given calendar month by Metal Bulletin
Termination Of Trading Trading terminates on the last business day of the contract month
Position Limits Visit cmegroup.com/nymex-position-limits for detailed NYMEX Position Limits
Exchange Rulebook COMEX 195 This contract is listed with, and subject to, the rules and regulations of COMEX COMEX 196 This contract is listed with, and subject to, the rules and regulations of COMEX
Block Minimum 10 contracts

For more information about Alumina Futures, please visit cmegroup.com/aluminum, or contact metals@cmegroup.com.

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