November Industrial Metals Report

  • 28 Nov 2018
  • By CME Group
  • Topics: Metals

Copper Futures

  • Open interest in Copper futures surged by 87% YoY in 2017 to a record high of nearly 338k contracts on August 16, 2017 and remained range-bound since then.

    (Source: CME. Data as of 31 Oct 2018)
  • The marketplace for Copper futures is composed of a diverse group of participants.

    Open interest is well-balanced between money managers and commercial hedges.
    (Source: CFTC. Data as of 30 Oct 2018)
  • According to the Commitment of Traders Report published by the CFTC, net long positions in COMEX Copper futures across Money Managers peaked at 80,252 contracts on 12 June before shifting into negative territory, where it has remained since then.

    (Source: CFTC. Data as of 30 Oct 2018)
  • Copper futures volume reached an all-time high in June with an average daily volume exceeding 172K contracts (~2 mil mt).

  • 136k contracts, or approximately 1.7 mil ST, of Copper futures traded on average every day so far this year.

    (Source CME. Data as of 31 Oct 2018)

Copper Stocks – Financing Opportunity

  • COMEX Copper inventory reached 252,986 short tons on 7 May 2018, the highest level in 14 years, supported by the increased financing activity.

    The headline number of stocks have decreased by nearly 100K short tons since then following negative arbitrage window with the other Exchanges.
  • The spot month position limit currently stands at 1,500 contracts.

  • Copper warehouses and physical delivery are available in 6 states in the U.S.

  • 12 warehouse companies are approved for COMEX Copper storage.

    (Source CME. Data as of 31 Oct 2018)

Copper Options – Transparent and Efficient Way to Trade

  • Average daily volume in Copper options has reached 1,352 contracts with open interest hit all time high on October 24th   36.7K contracts and continues to grow.

  • Block trades and electronic volume have strengthened considerably as IDB’s have increased their activity in the market.

    So far this year 30% of Copper options volume has been booked via CME Clearport block trades compared to a 6% share of volume in 2017.
    (Source CME. Data as of 3 Nov 2018)
  • CME Direct Screen provides the most comprehensive trading access to CME Options markets

    Take advantage of narrow bid-ask spreads on CME Globex screen, instantly monitor option prices, implied volatility and Greek risk metrics in real-time.

    RFQ functionality
    will allow to electronically execute multi-leg and hedged options strategies while remaining completely anonymous.

    On CME Direct one can explore the world of advanced options analytics with value-added QuikStrike tools (open interest and volume heatmap, volatility smile, term structure).

Regional Risk Management tools

  • CME offers a suite of Futures products to manage regional Aluminum Premium risk.

    These products cover U.S. Midwest premium (AUP), Japan premium (MJP), and European duty-paid (EDP) and duty-unpaid (AEP) premiums, which provide the global Aluminium industry with the perfect tool the hedge import duties and regional aluminum premium risk exposure.
  • Average daily volume for the suite of Aluminum Premium futures so far this year was 613 contracts (~15K mt), up by 8% YoY.

    U.S. Midwest premium (AUP) futures is the most liquid contract which traded 414 lots daily so far this year, up by 22% YoY.
    (Source CME. Data as of 31 Oct 2018)
  • U.S. Midwest Hot-Rolled Coil Steel Futures

    Average daily volume in HRC futures is 476 so far in 2018, up by 88%. Average daily volume in BUS futures has reached 81 in 2018, up from 6 ADV in 2017.
  • Along with US Busheling Scrap and Iron Ore contracts, US Midwest Hot-Rolled Coil Steel futures is a perfect tool to manage regionally relevant steel, scrap, as well as global iron ore price risk.

    (Source CME. Data as of 31 Oct 2018)

Zinc Futures

  • Supported by professional Market Makers, CME Zinc futures markets show narrow bid / offer spreads during both Asian and London afternoon / US morning sessions.

    Average Daily volume increased from zero in April-May to 200 contracts in October while open interest reached 72 contracts by late-October.
    (Source CME. Data as of 31 Oct 2018)
  • CME Zinc futures provides simplicity of monthly futures traded in the centralized electronic market.

  • The settlement process is simple and transparent.

    CME Zinc allows to make significant capital savings due competitive margins, trading and clearing fees as well as significant margin offsets with other benchmark metals contracts like copper, gold and silver.
    To find out more, please visit www.cmegroup.com/zinc

Benefit from Margin Offsets

Margins are subject to change. Source: CME. Data as of 31 Aug 2018 For more up-to-date information, please check CME Group website:

COMEX: cmegroup.com/clearing/margins/inters.html#exchange=CMX&sector=METALS
NYMEX: cmegroup.com/clearing/margins/inters.html#exchange=NYM&sector=METALS

Access the Global Industrial Metals market at CME Group

To learn more about Industrial Metal futures and options, please visit cmegroup.com or contact metals@cmegroup.com

About CME Group

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