MetalMiner: New CME Midwest Aluminum Swap To Offer Price Stability

Buyers & Sellers Can Hedge Against the Swaps Price — Not So with Platts Midwest Ingot.

Aluminum buyers will soon have a new commodity risk management tool at their disposal — the CME will shortly launch its Midwest Aluminum Swap futures contract. We view this as a huge opportunity for any buying organization sourcing semi-finished aluminum products within the United States.

The contract will begin trading on April 30. Today, many aluminum buyers rely upon the Platts Midwest ingot price, currently updated weekly. The Platts price reflects a surveyed premium over the LME HG settlement quotation. In practicality, it has served as the primary means for buying organizations to underpin physical aluminum supply contracts. The new CME contract will use the Platts index. Read article to find out who benefits, and what may become of Platts.

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