- Why Molybdenum futures?
- What does the Platts reference price assess?
- Why did you choose the contract unit size of 1,322.77 pounds and how is the contract priced?
- Who trades Molybdenum futures on CME Group?
- How can you trade Molybdenum futures on CME Group?
- Are Interdealer brokers available for block trading of Molybdenum futures?
- What is the block trade minimum?
- How do I get set up to trade Molybdenum futures?
1. Why Molybdenum futures?
Molybdenum is a key material to improve the corrosion resistance of stainless steel as well as the strength, toughness, hardenability, and weldability of steel materials used across many industries. Other use cases include nickel alloys, chemical compounds, and lubricants. Due to its many applications, it is expected that the green energy transition will increase demand for molybdenum products substantially.
With this futures contract, CME Group allows you to forward hedge your molybdenum price risk using a centrally cleared, cash-settled financial instrument. This also means that this product lets you manage your commodity price risk separately from physical supply. Molybdenum Oxide (Platts) futures (“Molybdenum futures”) can be a cost-efficient hedging tool to protect profit margins and minimize risk.
Molybdenum Oxide (Platts) futures are available for the current and the next calendar year, thereby establishing a forward price curve and enabling long term hedging strategies.
2. What does the Platts reference price assess?
The underlying Platts assessment, Platts Molybdenum Oxide Daily Dealer (Global), serves as the key industry reference point for pricing molybdenum oxide and associated downstream products across the supply chain. The price assessment captures the value of technical-grade molybdenum oxide traded in spot markets across the main global trading locations. More information on the assessment methodology is available on the Platts website.
3. Why did you choose the contract unit size of 1,322.77 pounds and how is the contract priced?
The Molybdenum contract is made available for trading with a unit of measure of dollars per pound. One contract unit represents 1,322.77 pounds, the equivalent of 60% of one metric ton. The unit size was chosen to reflect standard trading terms in the physical molybdenum market, in which molybdenum oxide is priced on a “molybdenum contained” basis. Typically, the molybdenum content of molybdenum oxide is around 60%. This means that traders can trade the equivalent size in the futures size without having to adjust their futures trade for the “molybdenum contained” factor.
4. Who trades Molybdenum futures on CME Group?
Market participants seeking a central point of price discovery, price transparency, and risk management use our products. The contract should be of interest to miners, stainless steel producers, OEMs, as well as merchant traders. In addition, the contract will allow financial market participants access to the molybdenum market without having to manage a physical book.
5. How can you trade Molybdenum futures on CME Group?
Starting March 13, 2023, Molybdenum futures will be available to trade on-screen via CME Globex and for submission for clearing through CME ClearPort. More information about CME ClearPort registration is available here.
6. Are Interdealer brokers available for block trading of Molybdenum futures?
Yes. A number of interdealer brokers are able to facilitate block trading in Molybdenum futures. Contact information is available here.
7. What is the block trade minimum?
There are minimum quantity and reporting time requirements for Molybdenum futures block trades. The minimum block trade size is two (2) contracts, and trades need to be reported by the broker within 15 minutes of execution.
8. How do I get set up to trade Molybdenum futures?
Contact your clearing member or firstname.lastname@example.org to get more information on to get set up to trade the Molybdenum futures on CME Globex and/or as a block trade on CME ClearPort.
Molybdenum Oxide (Platts) futures
Discover a cost-effective way to trade metals with Molybdenum futures, a powerful industrial metal that is the backbone of so many industries, providing the strength and stability needed to build a better future.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.